Lagarde, in Berlin, tells Germany — and the rest of Europe — to pay up

International Monetary Fund Managing Director Christine Lagarde warned of a “1930s moment” for the world economy if Europe does not solve its financial problems and said Germany must contribute more money to rescue efforts if a disaster is to be avoided.
In a public appeal Monday at a Berlin think tank, Lagarde voiced the growing unease among IMF officials about Europe’s potential to derail the world economy. Any number of events — a messy default in Greece, a bank failure, a disruption in the region’s financial markets — could trigger global economic turmoil.
To guard against such a scenario, Lagarde told the German Council on Foreign Relations that the nations using the euro — especially Germany — need to commit more money to backstop troubled governments and banks on the continent.
Without such funds, Lagarde said, “we could easily slide into a 1930s moment. . . . A moment, ultimately, leading to a downward spiral that could engulf the entire world.”
She said the 17 euro-zone countries also must move quickly to integrate their economies as deeply as they integrated their monetary systems with the creation of the common currency. Failure to act, she said, could precipitate a crisis comparable to the Great Depression.
“The world needs a strong leadership role from Germany today, and it is Germany’s core interest to provide such a role,” Lagarde said, acknowledging the frustration felt elsewhere in the world that a wealthy region such as Europe can’t muster a convincing response to its problems.

http://www.washingtonpost.com/business/economy/lagarde-in-berlin-tells-germany--and-the-rest-of-europe----to-pay-up/2012/01/23/gIQA71JlKQ_story.html