11 October 2012

Lagarde: Global recovery, growth hampered by uncertainty

She said that many of the right decisions had been taken to secure global recovery, but added that these decisions need to be implemented. “We need action to lift the veil of uncertainty. Many of us have debated what actions are needed, many of us understand what needs to be done, but it actually needs to happen”, Lagarde said. “What is most needed is cooperation. The task of securing sustained recovery has become more complex: it involves multiple players, and they are all playing a single game.” Lagarde noted that the world economy is seeing the emergence of new players, as traditional actors take on different roles. We really need to go through what needs to be done to make sure that recovery is not just a little bounce but is really here for the longer term and is sustainable”, she said.

Lagarde stressed the importance of ongoing reforms of the IMF’s governance, saying the institution is close to completing the 2010 reform package. Two of three thresholds for adoption have been passed—those on the consents needed for a change in quotas, and on the number of countries needed for reform of the IMF Executive Board. “These reforms will help the IMF be more representative and more inclusive, and will bring emerging markets into the top ten shareholders of the Fund”, Lagarde stated.

Taking questions from reporters, Lagarde said discussions between the IMF and the Egyptian authorities were due to resume in Cairo this month, and added she was confident that agreement would be reached. Lagarde noted that the IMF staff is in discussions with the Greek authorities to resolve differences to address all the elements of Greece’s IMF-backed programme. She also welcomed the launch of the European Stability Mechanism.

Full speech

© International Monetary Fund