IMF chief warns eurozone to act fast on debt crisis

FRANCE: IMF chief Christine Lagarde urged eurozone leaders Wednesday to move fast to resolve the bloc’s debt crisis, warning in an interview that the latest boost to markets by an ECB decision could soon wear off.

“No one has the luxury of time, this is really urgent,” Lagarde told the French daily Figaro in comments to appear on Thursday.

She said a decision by the European Central Bank to buy debt issued by struggling eurozone governments was “fundamental,” and warned that political leaders must “not let the effects of this measure wear off.” In early September, ECB President Mario Draghi vowed to aid countries like Spain by buying unlimited volumes of bonds to drive down borrowing costs.

The news sent markets soaring as investors saw a turning point in the crisis.

But Spain must first ask eurozone partners formally for financial aid, a move that Spanish Prime Minister Mariano Rajoy said on Tuesday was not imminent.

Financial markets have reacted negatively to uncertainty fueled by the Spanish premier’s remark.

Lagarde told Figaro: “The cost of solutions increases as time passes,” and added: “The more Europeans act fast at the national level, the more the dynamic can change.”

AFP