Lagarde on US jobs plan, calls for unified action on eurozone crisis

1. Wide of International Monetary Fund (IMF) Managing Director Christine Lagarde walking on stage and being greeted by Jane Harmon, head of The Wilson Centre
2. Wide of Lagarde at podium with audience
3. Cutaway of audience
4. SOUNDBITE: (English) Christine Lagarde, IMF Managing Director:
“Weak growth and weak balance sheets of government, financial institutions, households, are feeding negatively on each other fuelling a crisis of confidence and holding back demand, holding back investments and job creation. This vicious cycle is gaining momentum and frankly, it has been exacerbated by policy uncertainty and political lack of resolve and collective determination.”
5. Cutaway of audience
6. SOUNDBITE: (English) Christine Lagarde, IMF Managing Director:
“I certainly welcome President Obama”s recent proposal to address growth and employment. But, at the same time, it remains critical that this be associated with a parallel track that actually indicates and anchors those medium terms, actions and decisions, that are so needed to stabilise the debt and to redress for the better the debt trajectory.”
7. Cutaway of media and audience
8. SOUNDBITE: (English) Christine Lagarde, IMF Managing Director:
“Now, turning to Europe, the sovereigns must address firmly their financing problems through credible fiscal consolidation, it goes without saying, and to support growth, with the risks that are lurking in the background, it is also critical in my view that banks be able to strengthen their capital by way of capital buffers, for instance, with a view to avoiding the de-leveraging, that is the other natural tendency, to actually strengthen the institutions.”
9. Wide of Lagarde at podium
10. End of news conference
STORYLINE
The head of the International Monetary Fund (IMF) called on Thursday for bold and collective action to combat a slowing global economy and a worsening European debt crisis.
IMF Managing Director Christine Lagarde also said she welcomed President Barack Obama”s US job-creation plan in light of the unemployment crisis in the United States.
Lagarde will preside at her first annual meeting of the 187-nation lending institution next week.
A former French finance minister, she took over at the IMF in June, succeeding Dominique Strauss-Kahn, who resigned in May to fight attempted rape charges.
The charges were later dismissed.
Her speech was billed as a preview of the issues the IMF will address at meetings in Washington next week.
Lagarde said Obama”s job-creation programme must coincide with a credible plan to shrink the federal budget deficits in coming years.
For Europe, Lagarde said nations with huge debt burdens must get control of government spending.
And she said banks need to boost their capital, the resource a financial institution uses to deal with bad loans.
Lagarde”s comments followed critical remarks on Wednesday by World Bank President Robert Zoellick.
He faulted the 17 nations that share the euro currency for failing to take tough actions to prevent the debt crisis in Europe.

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