The International Monetary Fund (IMF), said last week that the euro area should take more steps to check the debt crisis, as the global recovery continued to be threatened by strains in the region and fragility elsewhere
“The euro area must build on recent measures and act decisively on multiple fronts to achieve a successful resolution to the crisis,” the IMF said in a working paper on global economic prospects and policy changes prepared for last weekend’s meeting of G20 finance ministers and central bank governors in Mexico City. Fiscal consolidation should also be structured to avoid a decline in demand, and countries with fiscal space should reconsider the pace of near-term adjustment.
To underpin the sustainability of the common currency, “deeper financial and fiscal integration over the medium term” was critical, noted the Washington-based global lender. The IMF suggested that European Central Bank (ECB) should take further actions including cutting the interest rate to bolster recovery.