WRAPUP 1-IMF calls for action as euro zone crisis festers

By Lesley Wroughton and Anna Yukhananov

TOKYO, Oct 11 (Reuters) - The IMF prodded the world's richcountries for swifter action on Thursday as Europe's debt crisisdrags on while the United States and Japan show scant progresshandling their budget deficits.

Christine Lagarde, managing director of the InternationalMonetary Fund, said political wrangling added to economicuncertainty, slowing growth in both advanced and emergingeconomies. The IMF cut its global growth forecast this week forthe second time since April.

"We expect action and we expect courageous and cooperativeaction on the part of our members," Lagarde said in a newsbriefing ahead of the IMF's twice-yearly meetings in Tokyo.

The IMF has expressed frustration with Europe's piecemealresponse to its debt crisis and warned that a recent respite inborrowing costs for debt-laden countries such as Spain may proveshort-lived unless euro zone leaders come up with acomprehensive and credible plan.

Standard & Poor's cut its rating on Spain on Wednesday to alevel just above junk territory, and Moody's may soon follow.

The IMF itself is struggling to muster the sort of decisiveaction that Lagarde wants to see from world leaders. Its 188member countries meet on Friday and Saturday, and will fallshort of a goal to implement voting reforms that would givelarge emerging economies greater say and elevate China to theNo. 3 spot in IMF power.

A territorial dispute between Japan and China added anotherelement of disharmony. China's top central bank and financeministry officials backed out of the meetings and sent deputiesto Tokyo instead. Lagarde said she hoped the world's second- andthird-largest economies could resolve their differences"harmoniously and expeditiously."

"I think they lose out by not attending the meeting," shesaid of the Chinese officials. "And they will be missingsomething great."

(Writing by Emily Kaiser; Editing by Tim Ahmann)

((emily.kaiser@thomsonreuters.com)(+65 6318 4763)(ReutersMessaging: emily.kaiser.reuters.com@reuters.net))

Keywords: IMF ECONOMY/