IMF chief tells Europe to take page out of US book

With the European economy lagging behind the United States, the head of the International Monetary Fund had a piece advice for the continent on Friday: "Believe in yourself."

There was much handwringing about Europe losing its competitive edge at the World Economic Forum in Davos this week, with the European Union racing to act to catch up with the United States and China.

At the forum's closing panel, focused on the global economic outlook, IMF managing director Kristalina Georgieva suggested a change in attitude to tackle the issue.

"The United States has a culture of confidence. Europe has a culture of modesty," Georgieva said. "My advice to my fellow Europeans is more confidence. Believe in yourself and most importantly, tell others that you do."

European Central Bank President Christine Lagarde warned that Europe needed to keep its "huge amount" of talent at home and raised the alarm for its leaders to act.

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"So if the European leaders can actually get their act together, respond to this wake-up call and existential threat that can be identified, then I think that there is a huge potential for Europe to respond to the call," said Lagarde, herself a former IMF chief.

She even suggested encouraging "disenchanted" talent to move to Europe after Donald Trump returned to the White House this week.

"Maybe it's also time to import a few of the talents that would be disenchanted, for one reason or the other, from another side of the sea," she said, without directly mentioning Trump.

In front of hundreds of movers and shakers in business and politics in his hotly awaited virtual speech on Thursday, Trump criticised Europe, especially over the United States' trade balance gap with the EU.

"I'm trying to be constructive because I love Europe," Trump said. "They do treat the United States of America very, very unfairly with the bad taxes."

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Lagarde said it was true there had to be negotiations with the United States.

"There has to be trade relationships that are organised in a framework that is giving confidence to the partners. It cannot be about removing all the rules, ignoring the institutions," she said.

Source: AFP