"We are still in the crisis," the managing director of the IMF, Dominique Strauss-Kahn warned yesterday, highlighting the danger of "complacency" among governments as one of the key risks to a sustainable recovery. "The recovery is getting stronger but everybody can understand it is not the recovery we want," he said.
Even though the world may be past the "apex" of the crisis, "there is need for urgent action" he told reporters. In particular, he pointed to the danger of a "recovery without enough jobs" as jeopardising not only a sustainable recovery but also political stability in places such as the Middle East and North Africa where economic problems have contributed to the recent unrest. "Jobs, jobs, jobs", he said, should be the priority, and urged governments not to cut training and education programmes even as they deal with their budget deficits. "Growth is not enough. You cannot have decent growth without having decent jobs."
Unemployment among the young, he added, could lead to a global "lost generation". "What was seen as just a transitory period [of joblessness] for some of them will turn into a life sentence and the possibility of a lost generation could materialise." Unemployment among the young is almost 1 million in the UK alone.
Continuing problems in the financial sector, especially the weakness of some European banks, overheating in emerging markets, and the sovereign debt crises in the eurozone were also identified as key risks.
However, Greece did receive a vote of confidence from Mr Strauss-Kahn, despite a rise in its borrowing costs yesterday. "I think Greece will make it" he said, provided the government implements in full the programme agreed with the IMF and eurozone partners in return for a €110bn loan last May.Reuse content