IMF blasts US for psychodrama over debt ceiling
The global economy, already in the grip of “high uncertainty”, could have “did without” the tense negotiations on the debt ceiling in the United States, said on Wednesday the managing director of the International Monetary Fund (IMF) Kristalina Georgieva .
Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), at the Milken Institute Global Conference in Beverly Hills, California, May 1, 2023.
Patrick T Fallon/AFP
In Washington, Democrats and Republicans are struggling to agree on a budget to avoid an unprecedented default on the June 1 deadline, raising fears among economists of a financial panic and a massive recession, with a contagion effect on the scale. world.
“The global economy, already facing such great uncertainty, could have done without” endless negotiations in Washington, said Kristalina Georgieva, at a forum in Doha, Qatar.
The Managing Director of the IMF, however, said she was convinced that an agreement would avoid a bankruptcy of the world’s largest economy.
The United States has always “struggled with this purely theoretical flaw”, but a solution is always found “at the last minute”, she noted.
“We must always remain aware that the risk is there,” she nevertheless warned.
Stephen Schwarzman, the boss of Blackstone, one of the largest investment companies in the world, also refused to believe in the prospect of a default in the United States while underlining the “political impasse”.
“The whole world is watching what is happening,” added this magnate close to the Republicans.
The United States is not immune to “miscalculation by those involved in the negotiations”, he stressed, but “it would offend American voters and put enormous pressure so that things are solved in a few days”.
To remove the risk of bankruptcy, Congress – the Senate held by the Democrats and the House with a Republican majority – must vote to raise the maximum authorized public debt ceiling.
To give the green light, the Republican camp demands to cut public spending.
But President Joe Biden, who is campaigning for re-election on the theme of social justice, opposes it.
The Democrats are in favor of reducing the deficit in a country indebted to more than 31,000 billion dollars, but would prefer to tax the richest and large companies more, without touching either social benefits or huge investment projects.
A default could have catastrophic consequences for the US economy, economists say, and cause a crisis that would inevitably spread to Europe and the rest of the world.
AFP
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2023-05-24 15:05:01
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