IMF urges euro zone to use economic rebound to tackle problems

WASHINGTON (Reuters) - The euro zone should use its "robust" economic rebound to tackle reforms that are politically difficult to push through, Poul Thomsen, the head of the International Monetary Fund's European Department, said on Friday.

The European Commission expects the gross domestic product of the 19 countries sharing the single currency to grow 1.7 percent this year and 1.8 percent in 2018. The IMF expects growth of 2.1 percent this year and 1.9 percent in 2018.

"The key challenge facing policy-makers is to take advantage of the robust recovery to take measures that are politically difficult," Thomsen said in a press conference at the IMF and World Bank fall meetings in Washington.

"This is the time for authorities in countries that need to build fiscal space to do so. This is the time for regulators in countries where banks need to clean their balance sheets to start doing so," he said.

"And this is the time for countries that need to make structural reforms to boost productivity to start doing so. If not now, when?" Thomsen said.

Thomsen did not name any countries.

Italy, however, is struggling with low growth, high public debt and a high level of non-performing loans in its banking system, while France needs to make its labour market more flexible and Spain has to tackle high unemployment. Germany, the powerhouse of the euro zone, needs to boost investment.

(Reporting by Jan Strupczewski; Editing by Paul Simao)