IMF gets tough with eurozone: support banks, reform economies or risk slow growth in long term

The International Monetary Fund says the 17 European Union countries that use the euro risk being mired in low growth and high unemployment if they don't get their banks lending again and urgently reform labor markets.

In an assessment published Monday, the IMF identified four areas for action: problem banks need to be identified and helped so the whole financial sector has the confidence to lend; a unified set of banking rules need to be drawn up; the European Central Bank should continue its loose monetary policy; and countries must make their economies competitive, including by freeing up their labor markets.

The report warned that "centrifugal forces across the euro area ... are pulling down growth everywhere" and that without serious reforms, the region could suffer long-term damage to growth.