NEWS

IMF strategy not well adopted, former boss says

The strategy of the International Monetary Fund for Greece has not been properly adopted, according to comments made in Beijing by the former head of the Washington-based organization, who also predicted that Europe will need a lot of time to escape from a sovereign debt-crisis that threatens to break up its common currency area.

Speaking on Monday in a rare public appearance after the sexual assault scandal, Dominique Strauss-Kahn said a solution to the woes dogging the euro area cannot be based on belt-tightening measures alone but will instead require measures to stimulate growth.

Unless effective action is taken, the former French finance minister told reporters at a business conference in the Asian country, the European Union could have no economic growth for five to seven years.

Strauss-Kahn said that the IMF recipe for Greece has not been well adopted, which he described as a ?pity,? a Dow Jones report said Monday.

According to the report, the French politician said that banks in Europe prefer to reduce lending than raise new capital to meet higher capital adequacy ratio standards, which has a negative impact on the regional economy.

Strauss-Kahn urged Germany and France to hammer out a common strategy to save the day, warning that a breakup of the eurozone would not solve the Continent’s debt crisis.

?We need to have the European Union being a real union. That is the only way to solve the crisis,? he said.

Strauss-Kahn was forced to resign as IMF boss following accusations of sexually assaulting a hotel maid in New York, a scandal that caught international headlines and halted his ambitions for the French presidency. The allegations have since been dropped.

He made no mention of his May arrest or his resignation as managing director of the IMF.