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IMF, World Bank Chiefs Urge Focus On Fair Growth

While there seems to be a wide consensus on long-term strategies for reform, there is less agreement on how painful such policies should be in the near term given the persistent risk of recession and surging unemployment.

"One lesson though is clear from history," Lagarde said. "Reducing public debt is incredibly difficult without growth. High debt, in turn, makes it harder to get growth, so it's a very narrow path to be taken."

"It's probably a long path, and one for which there is probably no shortcut either. It's a path that needs to be taken," she said.

Lagarde said monetary policies must encourage banks to lend, while spending cuts are adjusted to the "right pace." Debts must be brought down in the medium term, and structural reforms are needed to sustain growth in the long term, she said.

"That's the package that is needed," Lagarde said. "Let us not delude ourselves. Without growth, the future of the global economy is in jeopardy."

"It's a marathon, not a sprint. It could take years," Lagarde said in an on-camera debate hosted by the British Broadcasting Corp., where she good naturedly traded jibes with German Finance Minister Wolfgang Schauble.

"When you are running the 42 kilometers of a marathon, you can't just stop and turn around and go the other way," Schauble retorted, accusing those who favor going easy on debt reduction of backpedaling on their commitments.

"Increasing public debt does not enhance growth, it damages growth," he said.

Lagarde contended that it was not an issue of reversing commitments but of adjusting the pace to suit each country's unique situation.

The IMF has scaled back its global growth forecast for 2012 to 3.3 percent from 3.5 percent, and has warned that even its dimmer outlook might prove too optimistic if Europe and the United States fail to resolve their crises.

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