MercoPress. South Atlantic News Agency

IMF recommendations to Argentina and Europe

International Monetary Fund, IMF, Managing Director Rodrigo de Rato who is scheduled to visit several Mercosur members next month showed a contemplative attitude towards Argentina, defended IMF crisis role and said Europe was not contributing to world growth as it should.

Interviewed by a newspaper from Barcelona, the former Spanish Finance minister indicated that the "objective is to get Argentina back to normal", a country which currently has a "very difficult access to international financial markets".

However Mr. Rato recognized the efforts of the current administration with a strong economic recovery and an improved budgetary policy, but also underlined that "growth is not all, since Argentina has suffered a tremendous social punishment".

Mr. Rato added that the IMF "is known for its role during crisis and those are very straining moments", and sometimes is blamed for things which the organization is not responsible.

"Linking the IMF with a country crisis as if it were the cause is not true and oversimplifies a very complex situation".

Talking about the world economy Mr. Rato estimated this year's expansion in 4,6%, although "some matters have not evolved as expected".

"Europe is not contributing to world growth as it should and its unemployment remains static at 9%. Aging populations and social needs require growing, dynamic economies, otherwise you have larger budget deficits, taxes are not reduced, pensions remain unchanged and strong austerity adjustment policies become inevitable", warned the IMF Managing Director.

Mr. Rato insisted Europe must create jobs and "Germany has began moving in that direction", so has the United Kingdom "where the right decisions have downed the unemployment rate to 5%".

Regarding oil and the current price stampede Mr. Rato said that "the price of oil has a structural component which is energy consumption expansion and this must make countries review their energy policies and broaden sources, plus take into consideration geopolitical problems".