Euro area economies are facing a “lackluster medium-term outlook,” the International Monetary Fund (IMF) reported on Friday.
A key issue for Euro area countries is the ongoing Greek crisis, according to Poul Thomsen, Director of the IMF’s European Department.
Thomsen praised Greek efforts so far.
He said “Greece’s fiscal adjustment since the beginning has been extraordinary. There’s no doubt about that – that the burden on the Greek population has been extraordinary and Greece’s ability to adjust stands out by any comparison if we look at it from the beginning of 2010.”
But, Thomsen said, much work remains.
He said “We need to underpin this fiscal adjustment more with structural reforms, with measures that we think are credible and can be sustained. Otherwise, we’re just going to end up in a situation where six and nine months, we’re going to come back and have to ask for new measures.”
The IMF supports a shared burden in finding a permanent solution to Greece’s crisis.
Thomsen said “There are two legs to this – difficult decisions in Athens, difficult decisions in member states.”
The IMF also said it stands ready to work with Ukraine’s new government. Thomsen said the ongoing review of the Fund’s program in Ukraine can be wrapped up successfully.