WRAPUP 1-Time to draw up, not implement, exit strategies-IMF

(Adds details, background)

By Tamora Vidaillet

PARIS, Sept 11 (Reuters) - Governments would jeopardise hopes for recovery if they pulled the plug on economic support policies too soon, the IMF said on Friday, adding to wider calls for prudence in assessing evidence of reviving growth.

Improving economic data and a jump in global equities have fuelled hopes that recovery may be underway, but in an interview with French daily Le Monde to be published on Saturday, International Monetary Fund managing director Dominique Strauss-Kahn stressed the crisis was still in full swing.

"Let's not think that the crisis is behind us. We have exited the financial crisis ... we are still in (the midst of) the economic crisis, even if we can see light at the end of the tunnel," he said in an interview with the paper.

He adding unemployment would continue rising well into next year.

On Thursday, U.S. Treasury Secretary Timothy Geithner said a strengthening economy meant the government could end some of the extraordinary support it put in place for the financial system and prepare for a slow recovery. [ID:nN10401052]

The U.S. was now in a position to "evolve our strategy as we move from crisis response to recovery," he said.

Geithner later clarified there was still a long way to go before true recovery took root and that it would be necessary to keep applying stimulus measures as necessary to get growth firmly back on track.

Heeding calls to discuss the notion of exit plans with market players, European Central Bank Executive Board member Jose Manuel Gonzalez-Paramo said all options were open as to the order in which the ECB might unwind its support. [ID:nLB619270]

He added the ECB backed the European Commission's recommendation that countries should start to withdraw fiscal stimulus in early to mid-2010.

Strauss-Kahn said countries needed to lay the foundations for exit strategies tailored to their own needs, but that did not mean acting now.

"On the one hand, supportive public policies for growth must not be halted. Private demand is still extremely weak and we would risk a relapse," he said.

"On the other hand, we have to now prepare exit strategies adapted to each country and to make these known so that people know where we are heading," he added.

His message, reflecting mainstream thinking, dovetailed with comments from French Economy Minister Christine Lagarde. [ID:nLB511844]

"If we put a stop to public spending now, it will jeopardise the growth which is emerging," Lagarde told Canal Plus.

"We need to accompany it, to support it and to continue the stimulus (measures) laid out," she told the television station.

PAVING THE WAY

At a London gathering last week, officials from the Group of 20 developed and emerging nations insisted trillions of dollars of emergency economic support would be needed for some time.

They also called for some coordination of policies to avoid destabilising economies when nations start winding down costly stimulus schemes launched during the crisis [ID:nL5327479].

While the timing of exit strategies is yet to become clear, officials have started signalling a change in mood.

In line with that, Spanish Treasury Secretary Carlos Ocana said his country would significantly reduce some of its anti-crisis fiscal spending in 2010 as it tries to rein in its fiscal deficit. [ID:nLB711622] (Additional reporting by Anna Willard in Paris and Jason Webb in Spain; Editing by Chris Pizzey/Ruth Pitchford)