IMF calls for urgent action as euro zone crisis festers

The International Monetary Fund (IMF) prodded Europe and the US to act faster to resolve their debt troubles, blaming plodding progress for creating economic uncertainty and slowing global growth.

The International Monetary Fund (IMF) prodded Europe and the US to act faster to resolve their debt troubles, blaming plodding progress for creating economic uncertainty and slowing global growth.

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International Monetary Fund (IMF) managing director Christine Lagarde said she expected "courageous and cooperative action" as she laid blame on Europe and the US for fostering a sense of unease that has led companies to delay investment and hiring. "There are threats on the horizon, threats that can be addressed, should be addressed but are not necessarily addressed."

She also said that the IMF is happy for Greece to have an extra two years to bring its runaway deficit in line with the demands of global creditors

However, German finance minister Wolfgang Schaeuble said Europe was on track and had accomplished more than it may appear on the outside. "Europe is in the process of solving its problems."

Meanwhile, US Treasury secretary Timothy Geithner said Washington had a window of opportunity after the November 6 Presidential election to negotiate a debt reform framework. He said the magnitude of fiscal policy reforms that the US needed to achieve debt sustainability was between 2% and 3% of GDP, which was "a modest challenge relative to what most countries around the world face on the fiscal side."