IMF WARNS OF UNEMPLOYMENT THREAT

IMF head Christine Lagarde warned on Tuesday that high levels of unemployment in the euro zone were a significant threat to continued economic growth.

Speaking in Brussels at the launch of an IMF book on the creation of jobs in Europe, Lagarde outlined three key ways to make sure job creation is achieved in a region with more than 20 million people still seeking work.

"Half the people unemployed have been unemployed for over one year, so we're talking about long-term unemployment here," she said, adding that in Spain and Greece one out of two young people are still unemployed.

Lagarde said the first way to create jobs is a "timely and effective resolution system" to supervise the banking system and ensure that contagion never again occurs.

She also said that more efforts would have to be made to bring down debt levels among both households and the corporate sector. Though she said doing so is difficult as "to save is not a good idea because it will be a drag on demand."

Lagarde said the third key way to boost job creation is to reform the labour market by embracing technology, matching training with jobs available in the market and ensuring that appropriate safety nets for the unemployed are not taken away.

"As growth is picking up in the euro area, now is the time to do those things," she said.