IMF director warns of rising joblessness

Bloomberg

Speaking at the International Labour Organization in Geneva, Strauss-Kahn said the crisis threatens to cast millions back into poverty in the poorest countries, risking social unrest and even wars.

Some countries are facing "fiscal collapse" and there is a "real prospect" of financing being withdrawn from emerging economies, he said.

Calling on governments to pledge more tax cuts and spending, he said monetary policy has "reached its limit" and that recovery is possible in 2010, depending "on what policy is implemented."

The fiscal stimulus pledged so far amounts to between 1.6 percent and 1.7 percent of gross domestic product, short of the 2 percent demanded by the IMF, Strauss-Kahn said."There is still some room in some countries" for more but "this is not bad," he said. "What has been done is in some way the proof that coordination is not that bad." Improvements to the financial sector are needed to tackle the crisis, he said.