IMF pledges action as world presses over EU crisis

IMF pledges action as world presses over EU crisis

With calls for prompt action by the European Union coming from all sides -- including China, the United States, Brazil, and a host of fragile poorer countries -- the IMF said that Europe's leaders would take whatever action is needed to prevent the current debt crisis from escalating.

But worries remained that the ways the advanced economies were addressing their problems were already hurting the rest of the world, with surplus liquidity fueling food and oil price increases and market volatility, and spending cuts choking off growth, investment and trade.

Acknowledging that the 27-nation European Union -- the Fund's largest shareholder -- is at the center of the crisis, the IMF's policy board said it had agreed to act decisively and collectively "to restore confidence and financial stability, and rekindle global growth."

"Euro-area countries will do whatever is necessary to resolve the euro-area sovereign debt crisis and ensure the financial stability of the euro-area as a whole and its member states," the board said.

IMF chief Christine Lagarde, on the firing line two months after being unexpectedly drafted from her job as French finance minister to lead the global emergency lender, insisted that the world's top financial officials were serious about facing the crisis.

"There was no denial, no finger-pointing," she said of Saturday's meeting of the IMF's powerful International Monetary and Finance Committee. Tharman Shanmugaratnam, the IMFC chairman, added that that the members clearly recognized that "we are in a precarious situation."

The promises came after a wave of calls for European leaders to take action.