IMF says worst not over

IMF says worst not over

LONDON (Reuters) - The head of the IMF questioned on Monday any debate about when to roll back stimulus spending, saying the world economy had yet to weather the worst of a recession that claimed a record number of European jobs.

The 16-country euro zone lost a record 1.22 million jobs in the first quarter, official data showed. Employment during the first quarter fell 1.2 percent year-on-year, the deepest annual drop since measurements started in 1995.

Even if some form of economic recovery is not far off, analysts say unemployment will climb for many months to come.

Underlining the fragile state of the global economy, an influential economist said China would not see a rapid rebound and South Korea's finance minister said its economy was still sliding, although the pace had slowed.

But in southern Italy, Group of Eight finance ministers meeting at the weekend described their economies in the most positive terms since the collapse of U.S. bank Lehman Brothers nine months ago heightened the world's worst financial crisis since the Great Depression of the 1930s.

"Their (G8) stance is that we are beginning to see some green shoots but nevertheless we have to be cautious," International Monetary Fund chief Dominique Strauss-Kahn said during a visit to Kazakhstan. "The large part of the worst is not yet behind us."

Pressure has been building in the G8, particularly from fiscally conservative nations such as Germany and Canada, for plans to wind down stimulus as soon as it is no longer needed. Read Article... http://www.reuters.com/article/newsOne/idUSTRE55E0BJ20090615

European leaders meet amid euro-zone worries

European leaders meet amid euro-zone worries

BERLIN (Reuters) - European leaders met in Berlin on Sunday to agree a common stance on overhauling global financial rules but their summit risked being overshadowed by concerns about the fragility of euro zone and eastern European states.
The host, German Chancellor Angela Merkel, wants the meeting to reaffirm a commitment to free trade, stronger regulation of financial markets and coordinated action to shield the bloc from the worst downturn in the postwar era.
European countries would then take this message of unity to a broader summit of G20 nations in London on April 2, showing they are serious about delivering on an action plan agreed last November in Washington to combat the financial crisis and guard against future meltdowns.
But new tensions within the single currency bloc and the financial woes of European Union members to the east have cast a cloud over the meeting in the German capital.
Ahead of the gathering, the IMF threw its weight behind the idea of a common European bond to alleviate pressure on euro states such as Ireland and Greece that are being forced to pay hefty premiums over stronger bloc members to finance their debt.

(Dutch officials arriving in Berlin, source video NOS.nl)