The recovery of the global economy is fragile and “unsustainably high” debt in major economies requires deficit reduction, German Chancellor Angela Merkel and the leaders of the world’s top international economic organizations said.
The euro region must implement economic-policy changes to enhance growth and competitiveness, and the U.S. has to embark on a path of credible fiscal consolidation, Merkel and leaders including International Monetary Fund chief Christine Lagarde said in a joint statement e-mailed after talks in Berlin today.
“Decisive action has to be taken to ensure fiscal consolidation at an appropriate pace coupled with structural reforms,” the leaders said in the statement distributed by the Chancellery in Berlin. “Policy action will need to maximize synergies between macroeconomic and structural instruments.”
The IMF earlier this month warned that the risk of a deeper slowdown in the world economy would increase without a solution to problems in the U.S. and Europe. Growth in the world economy will hardly accelerate, to 3.6 percent in 2013 from 3.3 percent this year, according to today’s statement.
The release was issued on behalf of Merkel, Lagarde, Organization for Economic Cooperation and Development Secretary-General Angel Gurria, World Trade Organization Director-General Pascal Lamy, International Labor Organization Director-General Guy Ryder and World Bank Group President Jim Yong Kim.