'No alternative to austerity' says IMF chief

IMF chief Christine Lagarde insisted Thursday there was no alternative to the agenda of austerity being pushed across Europe, after massive demonstrations in several countries demanded an end to the policies.

"There is no alternative to austerity," Lagarde told Swiss public broadcaster RTS.

"The situation is difficult," she acknowledged, adding that countries needed to simultaneously observe "budgetary discipline", "prefer elements of growth" and promote "investment in employment".

The interview was conducted on the sidelines of a symposium in St. Gallen in northeastern Switzerland, which each year gathers international decision makers in a sort of mini-Davos setting.

Returning to out-of-control deficits was not an option, Lagarde said, adding that stimulus policies were not the way to go, "since this means more debt."

Her comments came a day after tens of thousands of angry protesters staged May Day rallies in several countries of the crisis-wracked eurozone, demanding an end to austerity measures many blame for stagnated growth and spiralling unemployment.

She said Germany -- blamed by many for spearheading the austerity drive -- was "harvesting the fruits of its policies."

She also brushed aside speculation she could be forced to resign as IMF chief due to a brewing scandal over a huge state payout to a disgraced tycoon when she was French finance minister.

"The IMF does not speculate and I don't speculate," she said.

Lagarde has been ordered to appear before a special court at the end of May to answer questions over her handling of a dispute that resulted in 400 million euros ($520m) being paid to Bernard Tapie, a former politician and controversial businessman jailed for match-fixing during his time as boss of leading French football club Olympique Marseille.

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