EU must reform to help jump-start economic revival, says IMF
International Monetary Fund (IMF) head Christine Lagarde has warned that current European growth may not be sustainable, claiming reforms are needed across the EU to jump-start revival.
The former French finance minister said that while Europe appeared to be "turning the corner'', it was premature to be declaring victory.
In a wide-ranging speech on the outlook for the continent delivered to the European Economic and Social Committee, Ms Lagarde said a failure to revive investment and employment would not bode well for the future.
"There is a palpable sense of optimism in some quarters that the European crisis is over,'' she said.
"But can a crisis really be over when 12% of the labour force is without a job? When unemployment among the youth is in very high double digits, reaching more than 50% in Greece and Spain? And when there is no sign that it is becoming easier for people to pay down their debts?''
As European finance ministers held a simultaneous meeting to try and reach a way forward on the complex issues surrounding a pan-European banking union, the IMF chief said growth rates and output levels remained well below what they should be.
She said the only durable solution was in "jump-starting'' growth, setting out four priority areas including reviving credit, supporting demand, reducing debt and fostering growth friendly labour markets. "The goal of reform is to break down barriers to growth," she said.