IMF Managing Director Christine Lagarde said Friday that a French bid to bring its public deficit down to 3.0 percent of output this year was “extraordinarily ambitious” and urged Europe in general to “take a bit more time” to straighten out its finances. “That seems to us to be an extraordinarily ambitious target,” Lagarde told France 2 television during an interview at the World Economic Forum in Davos, Switzerland, when asked about the French government’s goal, which Paris set to respect an EU limit for public deficits and thus maintain credibility on sovereign debt markets. “The path must be taken collectively by Europeans. France should not be alone, Spain alone, Greece alone and saying ‘it is too hard for me, I will go more slowly’,” Lagarde said. “It would be better to work collectively, to take a bit more time rather than to embark on a forced march,” the International Monetary Fund chief said. She noted that Spain was suffering after it decided last year to implement austerity measures aimed at putting its economy back on a sound footing as quickly as possible. The IMF has forecast that the eurozone will wallow through a recession this year, and Lagarde acknowledged that “the effect of austerity plans on growth is stronger than we had anticipated three or four years ago.” She said governments still must reduce their deficits and debt but suggested that public officials go “a little more softly” to avoid undermining emerging prospects for growth.
