• Kyodo


International Monetary Fund chief Christine Lagarde is prodding Japan and China to ease tensions over their territorial dispute, saying the shaky world economy needs the two Asian economic giants to support sustainable growth.

“Both China and Japan are key economic drivers that do not want to be distracted by territorial division,” Lagarde told Japanese reporters Tuesday in Washington ahead of the annual meetings of the IMF and the World Bank in Tokyo next week. “The current status of the economy and the global economy needs both Japan and China fully engaged.”

She also indirectly pressed the two countries to find common ground to resolve the dispute over the Japanese-controlled Senkaku Islands, saying the coexistence of neighboring countries “requires a certain degree of tolerance.”

On the sovereign debt crisis in Greece, Lagarde stressed the need to reduce its hefty public debt despite opposition by European Union members that own Greek government bonds.

Noting that there are a range of options that need to be considered to revamp Greek public finances, she said, “There is one chapter about fiscal measures, one chapter about structural reforms . . . one about debt sustainability of the country” and that all of these chapters have to be addressed.

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