Nov 2010 Financial News

Global financial crisis is not over-IMF boss

Nov 19, 2010

The global financial crisis is not over yet, the head of the International Monetary Fund said in comments published Wednesday.

"Even if certain politicians are prematurely declaring the crisis as over, my answer is 'no'. A clear 'no'," Dominique Strauss-Kahn was quoted as saying by German magazine Stern.

Part of the reason was that the pattern of worldwide economy recovery from 2009's sharp downturn was uneven, Strauss-Kahn said, adding that countries using their currencies as "weapons" to gain an advantage also posed a danger.

The US Federal Reserve said this month it was pumping another US$600 billion into the ailing US economy while in Europe there is speculation that Ireland might need a bailout in order to rescue its stricken banks.

There have also been fears of a currency war between the United States and China and of increasing trade protectionism.

Strauss-Kahn also had harsh words for Germany, saying that a strong recovery seen this year in Europe's largest economy might peter out if conditions elsewhere fail to pick up.

"Things are going well in Germany at the moment but the German economy depends on the purchasing power of people in other EU countries.

"As long as recovery elsewhere is weak, the German economic miracle won't last that long," he said.

He also said that criticism from the United States and elsewhere of Germany's trade surplus, meaning it exported much more than it imported, was "in principle correct.

"You can't defend your own surplus and at the same time criticise others' deficits," Strauss-Kahn said, referring to global trade imbalances.


Source:
Jamaica Observer
Friday November 19, 2010

http://www.jamaicaobserver.com/business/Global-financial-crisis-is-not-over-IMF-boss_8162994