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IMF

DSK was ‘excellent’ IMF head: Lagarde

Dominique Strauss-Kahn was an "excellent" IMF director, his new successor Christine Lagarde said Sunday, but added that the international institution will need time to heal from the recent scandal that forced his resignation.

“Some people are very hurt. Other people feel betrayed. It’s a very strange chemistry of frustration, irritation, sometimes anger, sometimes very deep sadness as well,” Lagarde told ABC television’s “This Week” program.

Lagarde said that Strauss-Kahn “has done an excellent job as managing director” but added that there are “wounds” at the International Monetary Fund following the scandal that forced him out of his job.

Lagarde, the former French finance minister, took over as managing director of the International Monetary Fund on July 5, following the May resignation of Strauss-Kahn, who is fighting charges of sexual assault.

The criminal case against the prominent French politician, who was once seen as a serious contender for the presidency, suffered a potentially fatal blow last week when prosecutors cast doubt on the credibility of the Guinean-born hotel maid who accused him of sexually assaulting and attempting to rape her on May 14th.

Prosecutors have said the maid lied in sworn testimony in the case, and has given false information on tax and asylum application forms, including information about an alleged gang rape in Guinea.

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ECONOMY

Make reforms while sun shines on world economy: Lagarde

International Monetary Fund chief Christine Lagarde has urged France and other countries to push through reforms "while the sun is shining" on the global economy.

Make reforms while sun shines on world economy: Lagarde
International Monetary Fund chief Christine Lagarde. Photo: AFP

In an interview with France's Le Journal du Dimanche published on Sunday Lagarde said the strength of the global economic recovery had taken the IMF by surprise.

“In 2017, for the first time in a long time, we revised our growth forecasts upwards whereas previously we used to lower them,” she said.

Global growth of 3.6 percent was both “stronger and more widely shared” in 2017, she said, noting that developed economies were now growing again under their own steam and no longer merely being pulled along by demand in emerging markets.

Lagarde said the favourable climate lent itself to implementing reforms.

“When the sun is shining you should take advantage to fix the roof,” she said, using one of her favourite maxims.

This year's global growth is on a par with the average of the two decades leading up to the global financial crisis of 2007-2008.

The IMF has forecast a further slight improvement in 2018, to 3.7 percent.

In Lagarde's native France, seen for years as one of Europe's weak links, the recovery kicked in in earnest this year.

From 1.1 percent in 2016, growth is expected to rise to 1.9 percent in 2017 — still short of the 2.4 percent forecast for the eurozone as a whole but better than the 1.6 percent initially forecast in the eurozone's second-largest economy.

Centrist President Emmanuel Macron aims to consolidate the momentum and bring down stubbornly high unemployment with an ambitious programme of labour, tax and welfare reforms.

Lagarde said the changes were key to boosting France's credibility at a time when Macron is pushing for reforms at the European level, including closer integration among eurozone members.

The managing director of the IMF was France's finance minister in 2008, when the euro looked to be in serious jeopardy.

Nearly 10 years later, the currency is out of the woods.

But, Lagarde warned, “the mission has not been accomplished — and maybe never will — because Europe is not united on moving towards greater integration while maintaining national sovereignty.”