IMF's Lagarde calls for more ECB stimulus -paper

FRANKFURT Mon May 12, 2014 3:46am EDT

FRANKFURT May 12 (Reuters) - Christine Lagarde, managing director of the International Monetary Fund, has repeated calls for more stimulus from the European Central Bank to keep at bay the risk of persistently low inflation in the euro zone.

Lagarde said in an interview with Germany's Handelsblatt published on Monday that the euro zone crisis is not over yet as credit flows are still hampered and the difference in funding conditions for companies across euro zone members still vary.

"On top of that, continuously low inflation brings additional risks," Lagarde was quoted as saying. "Monetary policy in Europe should therefore provide further growth stimulus."

Her comments come after ECB President Mario Draghi said last week the central bank was ready to take action as soon as next month to boost the euro zone economy if updated inflation forecasts merited it.

But Draghi also said that calls from international organisations and various politicians for the ECB to take action threatened to make the bank to look less than independent.

The ECB has faced growing pressure from international organisations like the IMF, as well as the from the French government. The Organisation for Economic Co-operation and development has also called for more action.

(Reporting by Eva Taylor Editing by Jeremy Gaunt)

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