IMF urges Germany to act “to face challenges” in the euro

The International Monetary Fund (IMF) today urged Germany to “help address the challenges of the euro” as the main economy of the region and said the economy will rebound in the second Germanic half of this year.

“We must seize the opportunity to further strengthen their own growth potential and actively participate in a clearer articulation of the architecture post-crisis economic and monetary union, to help restore market confidence,” the IMF in its annual assessment of the German economy.

Fund’s latest forecasts place growth in Germany in 2012 at 0.6% and 1.5% for 2013, while the eurozone as a whole suffers a recession of 0.3%.

The Fund noted that “the biggest eurozone economy, Germany can play a key role in addressing the challenges posed by the crisis.”

Therefore stressed that “the necessary implementation of ambitious structural reform agendas in several euro area countries should be complemented by measures pan.”

Among them, the international financial organization mentioned the use of structural funds of the European Union and increase the lending capacity of the EIB.

Furthermore, the reduction of imbalances in the euro area should be supported by “a natural rebalancing of the economy of Germany,” he said.

Thus, the IMF reiterates its calls to Berlin to soften the strict adjustment measures imposed on the members of the eurozone, and that barriers to the economic recovery in countries under severe financial pressure as Italy or Spain.

“The main risk facing Germany is an intensification of the crisis in the euro area, extending directly through real and financial channels, and indirectly through a slowdown in consumer sentiment and business,” he said.

In conclusion, the Fund added that another of the short-term priorities for Germany are “to strengthen the transition to growth led by domestic demand and ensure financial stability.”

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