WASHINGTON: The IMF yesterday said the euro area needs to move now to establish full banking union and that the European Central Bank should move on more demand-generating stimulus policies.

Underscoring that the eurozone crisis is in a “critical stage”, the International Monetary Fund stepped up pressure on Europe’s leaders to take real action on the banking sector and economic growth in their coming summit.

The Fund said in its annual review of the euro area economy that boosting demand cannot wait for structural reforms across the eurozone.

And it insisted, echoing the international pressure that was clear in the G20 summit in Mexico on Monday and Tuesday, that the region needed to establish a unified system for bank monitoring, resolution and deposit insurance.

“The euro area crisis has reached a critical stage,” the IMF said. “Despite extraordinary policy actions, bank and sovereign markets in many parts of the euro area remain under acute stress, raising questions about the viability of the monetary union itself.”

The Daily Sun/Bangladesh/ 23th June 2012