US, Europe must keep economic stimulus
The International Monetary Fund (IMF) has encouraged the USA and Europe to continue with their financial stimulus measures until unemployment in under control. IMF managing director Dominique Strauss-Kahn said it might take up to 12 months for recessionary pressure to truly recede.
“There are some encouraging figures, a few months ago from European countries and yesterday from the US and that’s all good news,” he said. “Nevertheless it does not mean the crisis is over. The crisis will not be over until unemployment begins to decrease and that will take many months.”
Strauss-Kahn said government support was important to avoid a ‘double-dip’ recession, which could occur if withdrawn prematurely. He predicted it would take 10-12 months for employment to stabilise and urged governments to continue with their policies until then.
“In the 10-12 coming months, unemployment will continue to rise,” he said. “That’s why we have to go on with the monetary and fiscal policies, the stimulus, until unemployment decreases. At that time we can declare victory.”
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