19 JUN 2011
By Simon Duke | Daily Express
Europe's political elite is ‘playing with fire’ through its failure to tackle the economic crisis engulfing Greece, the International Monetary Fund has warned.
The Washington-based watchdog predicted that a fresh round of turmoil would spread through financial markets unless European leaders shore up the stricken eurozone periphery.
In its quarterly health check on the global economy, the IMF said the US government must also stop ducking the tough decisions required to rein in its vast budget deficit.
MF director Jose Vinals said: ‘You cannot afford to have a world economy where these important decisions are postponed because you’re really playing with fire.’
Unless these dangers are addressed head on, new ‘shocks’ could ‘reverberate across the rest of the world’, which would in turn ‘seriously impair’ the ability of banks to raise funds, according to the IMF.
The stark message to European Union leaders came as Germany and France attempted to show a united front over a second rescue deal for stricken Greece.
Chancellor Angela Merkel backed down from German demands that creditors to the Mediterranean nation should have to shoulder a ‘substantial’ share of the mooted €150bn bailout.
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