Europe and U.S. should consider stimulating growth: IMF's Lagard

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IMF chief Christine Lagarde said in an interview released on Sunday that Europe and the United States should consider stimulating economic growth, if the situation permits, to offset a crisis of confidence hitting the global economy.

"Looking at Europe, we recommend countries to adjust their austerity programs to a changed situation and consider measures to drive growth," news weekly Der Spiegel reported her as saying.

"If the United States launches a credible middle-term adjustment program, there is possibly room to abandon the short-term austerity measures and to introduce some measures to drive growth," she added.

Lagarde caused a stir last weekend when she urged policymakers to force Europe's banks to boost their capital or risk derailing a fragile global recovery, a call she reiterated in the interview.

European politicians last week rejected the call, which would involve raising up to 200 billion euros ($290 billion) in new capital, adding to fears that policymakers may be underestimating the severity of the debt crisis.
 
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