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Euro nations 'should boost growth'

Some countries that use the euro have the flexibility to boost growth to help shore up the ailing eurozone economy, the head of the International Monetary Fund has said.

Speaking at the World Economic Forum in Davos, Christine Lagarde said the 17 nations that use the euro should not undertake dramatic spending cuts to reduce debts at the same pace or to the same degree.

"Some countries have to go full-speed ahead to do this fiscal consolidation, but other countries have space and room," Ms Lagarde said.

Though conceding that there was not many of them, Ms Lagarde said it was important that those that have the headroom should explore how they can boost growth.

She carefully avoided naming any countries, but had in mind Germany, Europe's largest economy and a major world exporter. She didn't specify how to boost growth either or how one eurozone country could help others grow.

In addition, Ms Lagarde said members of the eurozone should continue the drive to tie their economies closer together over the months and years ahead.

Ms Lagarde also repeated her belief that the Washington-based fund needs more resources if it is to help restore stability in the global economy.

The IMF has said it needs around 500 billion dollars (£317bn) more in financial firepower - a request that has met with mixed response and notably resistance from the United States.

Europe's debt crisis are a major concern for the business and political leaders gathered for the annual, invitation-only event at Davos.

Increasing numbers of people are questioning the purpose of the event as income inequalities grow worldwide. Protesters from the Occupy movement that started on Wall Street have camped out in igloos at Davos and are planning a demonstration later today to call attention to the needs of the poor and unemployed.


From Belfast Telegraph