IMF’s Rato says that European economies must try harder

PARIS (Reuters) – Europe’s economies are growing solidly but governments must not forget the long-term challenges of raising growth potential and cutting high unemployment, IMF Managing Director Rodrigo Rato said in an interview yesterday. Rato also warned Europe against protectionism and said all countries, particularly the large ones, must do their bit to bring the Doha trade talks to a successful conclusion. «The European economies are solid but the continent must not lose sight of the challenges that await it over the long term,» he told France’s Le Figaro newspaper. «The most fundamental is the weak growth rate of potential output, high unemployment, a weak labor participation rate and the risk that protectionism will reappear.» Population aging will accelerate in Europe after 2010, presenting another challenge over the long term, the International Monetary Fund chief said. Europe has made progress on economic integration, Rato said, but its leaders need to step up their efforts in this area. «Europe must now extend competition to other sectors, notably in services and financial markets,» he said.

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