WASHINGTON (Reuters) - Europe came under pressure on Saturday from other world powers to do more to fix its debt-heavy economy, which still threatens to undermine a fragile global recovery.
A day after top economies agreed more money for the International Monetary Fund to help contain Europe’s debt crisis, the fund’s governing panel said the euro zone now needed to get its debt under control, ensure the stability of its banking system and carry out “bold structural reforms.”
The panel in its statement also said advanced economies generally needed to tighten their budgets, though not excessively.
The head of the panel, Singapore Finance Minister Tharman Shanmugaratnam, said it was critical to get back to “normal” economic growth in two to three years in as much of the advanced world as possible, otherwise fiscal sustainability would not be possible.
Discussions on Saturday, he told a news conference, were “about the real theater of policy action, which is about fiscal reforms and structural reforms, not just in Europe although that is obviously an important focus of our attentions, but also in the United States as well as more generally amongst all players in the international economy.”
Throughout three days of meetings in Washington, top global finance officials tried to keep up the pressure on Europe to follow through on tough economic reforms that are considered the key to getting to the root of the region’s debt problems.
U.S. Treasury Secretary Timothy Geithner also urged the European Central Bank to play a central role.
“The success of the next phase of the crisis response will hinge on Europe’s willingness and ability, together with the European Central Bank to apply its tools ... flexibly and aggressively to support countries as they implement reforms,” Geithner told the IMF’s steering committee.
Writing by William Schomberg; Editing by Neil Stempleman and Leslie Adler