IMF chief says Europe looks like 'an ideas supermarket' for the U.S., calls for further integration

The head of the International Monetary Fund on Thursday called on Europe to achieve the full potential of its prized single market, lamenting what she described as a situation that makes the region look like "an ideas supermarket" for the U.S.

Speaking to CNBC's Karen Tso, IMF Managing Director Kristalina Georgieva said Europe's economic performance was strengthening and inflation was clearly on a downward trajectory.

Georgieva said that the IMF observing an uptick in consumption and expected interest rate cuts from the European Central Bank spelled out good news for investment in the euro zone. She said it would bolster the 20-member bloc's economic performance.

"We come with this relatively good news and with a warning: There is no time to waste for the euro zone to concentrate on productivity," Georgieva said.

"That means two things. One, to achieve the full potential of the single market. It is not there yet. We want to see more labor market flexibility in Europe, we want to see [a] deepening [of] the financial markets, integrating them [and] we want to see the banking union, the capital union in place," she continued.

"And two, we want to see much more attention to innovation, investing in [research and development], making it possible to have business based on innovation in Europe to materialize in Europe. Right now, Europe looks like an ideas supermarket for the United States," Georgieva said.

"A lot of what is invented here ends up being commercially viable and on scale over there and when you look at the main obstacle? 27 countries not yet integrated in a single market."

The European Union's single market seeks to guarantee the unrestricted movement of goods, capital, services and labor throughout the territory.

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