IMF chief Lagarde: Europe still poses an economic risk

IMF managing director Christine Lagarde says the US may be "turning a corner," but Europe's debt still poses a risk to the global economy.

Ms Lagarde said economic data indicate the global economy is looking up, largely bolstered by the gains of emerging and developing economies but Europe's debt still threatens a fragile recovery, according to Lagarde.

"Clearly, the risk that looms largest on the horizon is that sovereign and financial stresses return with renewed force in Europe," said Ms Lagarde.

"Not to talk about the increased price of oil."

Although the debt crisis and austerity measures in Greece continue to take their toll on the labor market in Greece, Lagarde praised the courage of the Greek people and the recovery efforts of the interim government headed by Prime Minister Lucas Papademos.

"There are very brave and courageous Greek civil servants, Greek workers, Greek people that face the obligation, that pay their tax, that bear the sacrifice of cut pensions and cut wages," said Lagarde. "I would say that any progress that is made in tax and revenue collection is also a great positive for the country."

Greece's economy is estimated to have shrunk by about a fifth since 2008, when it plunged into its deepest and longest post-war recession. About 600,000 jobs, more than one in 10, have been destroyed in the process.