Possible US default looms over meetings
Worries about a possible US debt default cast a pall over weekend meetings of global financial leaders in Washington. But they ended with some hope over signs that the US and European economies are pulling out of long slumps.
During three days of talks revolving around meetings of the 188-nation International Monetary Fund and its sister lending agency, the World Bank, top officials pressed the US to resolve the political impasse over the debt ceiling. The standoff has blocked approval of legislation to increase the government’s borrowing limit before a rapidly-approaching Thursday deadline.
US Treasury Secretary Jacob Lew has warned that he will exhaust his borrowing authority on Thursday and the government will face the prospect of defaulting on its debt unless Congress raises the US$16.7 trillion borrowing limit.
“We are now five days away from a very dangerous moment,” World Bank President Jim Yong Kim warned at the closing news conference on Saturday. “I urge US policymakers to quickly come to a resolution before they reach the debt ceiling deadline. The closer we get to the deadline, the greater the impact will be for the developing world.”
Kim said a default would be a “disastrous event” for poorer countries. It would also be certain to derail the already fragile global economic recovery.
“We know there are problems,” Tharman Shanmugaratnam, the head of the IMF’s policy-steering committee and Singapore’s finance minister, told a news conference at the end of the IMF meeting. “We know there are near-term risks, the most obvious one being what’s going on in the US with regard to the fiscal deficit.”
But one of the big near-term concerns, the expectation that the US Federal Reserve will start scaling back its massive stimulus program for the economy, is actually pointing to a positive development, Tharman said. It means that the US economy is strong enough to withstand a reduction of the stimulus.
IMF officials have been forecasting that the strengthening US economy will be a main driver of the global economy in the coming year.
At the same time, developing country economies are slowing and their markets have been unsettled since May by anticipation that the Fed will soon begin tapering its US$85-billion-a-month bond purchases, which poured cash into the economy to stimulate growth.
“The eventual normalization of monetary policy as economies recover in the West will be a net positive for the emerging economies,” Tharman said, meaning that the strength of the major economies will help carry the global economy forward.
Lew told finance ministers that the United States understands the role it plays as “the anchor of the international financial system” and assured them the administration was doing all it could to reach a resolution on the debt.
- About Us
- |
- Terms of Use
- |
-
RSS
- |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 娌狪CP璇侊細娌狪CP澶05050403鍙-1
- |
- 浜掕仈缃戞柊闂讳俊鎭湇鍔¤鍙瘉锛31120180004
- |
- 缃戠粶瑙嗗惉璁稿彲璇侊細0909346
- |
- 骞挎挱鐢佃鑺傜洰鍒朵綔璁稿彲璇侊細娌瓧绗354鍙
- |
- 澧炲肩數淇′笟鍔$粡钀ヨ鍙瘉锛氭勃B2-20120012
Copyright 漏 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.