IMF Says Existing Stimulus Could Suffice |
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April 26,2009
The head of the International Monetary Fund said on Saturday that if countries are successful in cleansing their financial systems, the fiscal stimulus already implemented for 2009 “may be enough”.
Dominique Strauss Kahn, the Fund’s managing director, said that all the IMF’s main members agreed on the need for fiscal stimulus in 2009 and had stopped worrying about small differences in the degree of stimulus. He called the transatlantic arguments that raged earlier this year “a little bit childish”.
There was no agreement yet on the need for further fiscal action in 2010, but the International Monetary and Financial Committee, the Fund’s governing body agreed to “deliver the scale of sustained fiscal effort necessary to restore growth within credible fiscal frameworks to ensure long-term sustainability”.
Mr Strauss Kahn again stressed the importance of action to repair the financial system and the IMFC’s confirmation of countries’ commitment not to allow any large institutions to fail. He said that the finance ministers meeting in Washington agreed that the individual actions of countries – whether to nationalise banks, create insurance systems, recapitalise or instigate public private partnerships – was less important than the speed of action. “All ministers go back committed to speed up the process,” he said.
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