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June 26, 2022

IMF head: Europe needs clear political plan

Being in Beijing, the head of the International Monetary Fund, Christine Lagarde, called on Italy and Greece to show “political clarity” about their debt crises, saying uncertainty about who will lead those countries is fuelling financial volatility, CNN informs. Lagarde said Chinese leaders are “clearly concerned” about the euro zone but she declined to discuss a possible contribution by Beijing to a bailout. Also, Lagarde said developing countries have offered to help increase the IMF’s resources but want it to help other troubled economies, not Europe.

“Most of those emerging market economies and their leaders who have indicated willingness to participate in the strengthening of the institution, the IMF, have done so with the explicit indication that it should not be specifically targeted for the euro zone,” she said. Beijing has bought bonds issued by Europe’s bailout fund and European leaders are looking to investors such as cash-rich China to help increase its strength, possibly to contributing to a co-investment fund that is being developed. Chinese officials have said they want to know more about how the proposed fund will function before deciding whether to invest. The 27-nation European Union is China’s biggest trading partner and plunging consumer demand has hurt Chinese exports.

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