MOSCOW, July 14 (RIA Novosti) - International Monetary Fund (IMF) stresses the urgent need to carry out structural reforms to spur investment, employment and productivity in the Eurozone, the Staff Report released on Monday states.
“The authorities are making continued efforts to ensure deeper structural reforms throughout the euro area in order to boost potential growth, to create jobs and to ensure that the intra-euro area rebalancing observed in recent years will continue,” IMF Executive Director Menno Snel stated in an official statement after the IMF Executive Board Article IV consultations with the Eurozone.
The final report, produced by IMF staff and officials from Eurozone member states, concluded that the area is steadily recovering from the crisis; however, complimentary policy actions are needed to support demand and boost investor confidence. Priority areas include tackling high youth unemployment in the area, aiming for higher public investment in creditor countries, and diversifying funding through securitization.
The IMF’s executive board also stressed that recovery levels are not sufficiently strong, financial markets remain fragmented, and borrowing costs are still high in distressed Eurozone economies.
The final IMF report proposes to support domestic demand until European banks are able to start lending again. The directors concluded that developing capital markets is crucial so that small and medium-sized enterprises have other means of financing besides banks.
Under Article IV of the IMF’s Articles of Agreement, the organization holds bilateral discussions with its members annually to address existing problems and determine the necessary steps to ensure potential stable growth.