June 13, 2019 / 2:47 PM / 3 days ago

Euro zone should have budget to stabilise, simplify fiscal rules - IMF

FILE PHOTO: International Monetary Fund Managing Director Christine Lagarde gestures as she attends the Women's Forum Americas, at Claustro de Sor Juana University in Mexico City, Mexico, May 30, 2019. REUTERS/Henry Romero

LUXEMBOURG (Reuters) - The euro zone should design its future budget to be able to stabilise its economy rather than just support its competitiveness and convergence, the head of the International Monetary Fund Christine Lagarde said on Thursday.

Speaking to reporters on the sidelines of a meeting of European Union finance ministers, who are debating the design of a budget for the 19 countries sharing the euro, Lagarde said the EU should also simplify its fiscal rules.

“We believe that in addition to competitiveness and convergence, which will keep busy the ministers today, we believe this is not enough, that stabilisation would also help,” Lagarde said.

“Simplification of the fiscal rules would also go a long way to avoid a lot of ambiguity and a lot of wiggle room. The debt should be the anchor and the operational tool should be public spending relative to GDP,” she said.

Reporting By Jan Strupczewski

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