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Tackling government debt top priority: IMF chief

Tackling government debt top priority: IMF chief

By AFP

TOKYO: Tackling soaring government debt is one of the top priorities for global policymakers as a fragile economic recovery takes hold, International Monetary Fund chief Dominique Strauss-Kahn said. "We have to fix the consequences of the policies which have been put in place" in response to the global economic crisis, he said.

Addressing the high level of sovereign debt is "probably the top priority" facing developed -- and many emerging -- economies in the coming years, Strauss-Kahn told a news conference during a visit to Japan.

He also warned governments that a premature withdrawal of their stimulus measures may nip an economic recovery in the bud.

"If you exit too early, then you have a risk of going back into a recession," he said.

"Our advice is that exiting from fiscal stimulus measures should be designed today but not implemented today because the crisis is not really over," he later said in a separate speech to students at Tokyo University.

While many advanced economies have clawed out of recession, governments need to focus on tackling high unemployment, Strauss-Kahn said.

"All efforts should be focused on fighting unemployment," the former French finance minister said.

Strauss-Kahn also said that the IMF will reopen talks with Ukraine, a day after presidential elections Sunday where pro-Russian politician Viktor Yanukovich won the first round against Prime Minister Yulia Tymoshenko.

"In no way has our commitment to Ukraine decreased but the troubled political period doesn't make it easy for us to discuss with the government," he said.

"So we expect after the election to make it possible to resume our relationship," he added. "Democracy is a fantastic thing but it creates also sometimes tensions with economic problems."