Recovery unstable without jobs, says IMF boss

Dominique Strauss-Kahn says there is still work to be done to build a sustainable recovery. Photo / AP

"We are still in the crisis," the managing director of the IMF, Dominique Strauss-Kahn, warned yesterday, noting the danger of complacency among governments as one of the key risks to a sustainable recovery.

"The recovery is getting stronger but everybody can understand it is not the recovery we want," he said.

Even though the world may be past the apex of the crisis, there is need for urgent action, he said. In particular, he pointed to the danger of a "recovery without enough jobs" as jeopardising not only a sustainable recovery but also political stability in places such as the Middle East and North Africa where economic problems have contributed to the recent unrest.

"Jobs, jobs, jobs", he said, should be the priority, and he urged governments not to cut training and education programmes even as they deal with their budget deficits.

Unemployment among the young, he said, could lead to a global lost generation. "What was seen as just a transitory period [of joblessness] for some of them will turn into a life sentence."

Unemployment among the young is almost one million in the UK alone.

Continuing problems in the financial sector, especially the weakness of some European banks, overheating in emerging markets and the sovereign debt crises in the euro zone were also identified as key risks.

But Greece did receive a vote of confidence. "I think Greece will make it," he said, provided the Government implements in full the plan agreed with the IMF and euro zone partners in return for a €110 billion ($200 billion) loan last May.

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