IMF to Europe: get your act together

IMF chief economist Olivier Blanchard warned European officials are lagging in addressing their debt crisis.

IMF 311 (photo credit: REUTERS)
IMF 311
(photo credit: REUTERS)
Strong words from the International Monetary Fund as global financial leaders prepare to head to Washington for meetings this weekend.

The IMF has issued a warning to European leaders - saying the euro zone is dragging its feet when it comes to stopping the debt crisis.

IMF Chief Economist Olivier Blanchard said, "I think we are very explicit in our messages, both in the EU and elsewhere, in saying that Europe must get its act together. That they met in July and took a number of decisions, as to, for example the role of the EFSF (European Financial Stability Facility) and it is absolutely essential that they do what's needed so that this is operational very soon. It is indeed a major source of worry so you can see us, as indeed, issuing a call to arms."

The IMF's concerns about Europe follow up a downgrade of Italian debt by ratings agency Standard & Poor's late Monday. The downgrade adds additional stress by raising borrowing costs for weaker members of the Euro zone.

But the IMF is not worried about Europe alone, in fact, in an update to its World Economic Outlook, the international lender warned Europe and the US could slip back into recession.