(CEP News) Frankfurt - International Monetary Fund Managing Director Dominique Strauss-Kahn said the current economic environment is dire and called for further action to be taken to prevent a wasteland of unemployment.

The current global economic crisis could lead to millions falling back into poverty, raising the risk of unrest and even war, Strauss-Kahn said while speaking at the International Labour Organization in Geneva on Monday.

Strauss-Khan also urged more states to reduce both tax rates and spending, adding that monetary policy has reached its limit.

The IMF chief added that an economic recovery is possible for next year, but that it will depend on what policy is implemented.

Furthermore, Strauss-Kahn said that while current stimulus measures are not bad, some countries have room for more. Current fiscal stimulus so far lies between 1.6% and 1.7% of global GDP, down from the 2% level required by the Fund.

(However), what has been done is in some way the proof that coordination is not that bad, Strauss-Khan said.

Written by CEP News European Staff, eunews@economicnews.ca, edited by Stephen Huebl, shuebl@economicnews.ca