2023-05-11 18:18:27
IMF communications director urges US to find consensus. Yuri Gripas
The International Monetary Fund “strongly encourages parties in the United States to come together to reach consensus.”
The IMF expressed concern on Thursday about “serious repercussions” on the global economy that a default by the United States would have, without an agreement to raise the debt ceiling, while Donald Trump urged the Republicans to provoke such a situation to exert pressure.
«There would be very serious repercussions not only for the United States but also for the world economy in the event of a default on the American debt.International Monetary Fund Communications Director Julie Kozack told a press conference call. “We strongly encourage the parties in the United States to come together to reach a consensus to resolve this issue as a matter of urgency”, she added. Among the repercussions, Julie Kozack cited “higher interest rates, wider instability and economic repercussions”.
A showdown
Democrats and Republicans are engaged in a tussle over raising the US debt ceiling, a necessary legislative maneuver so that the world’s largest economy can continue to borrow and pay its bills, officials and creditors. Without an agreement, it would potentially find itself in default of payment from June 1, an unprecedented situation. President Joe Biden, who is ruling out budget cuts for now, accusing Republicans in Congress of holding the economy down “hostage“, received Wednesday at the White House the leaders of the two camps. Another meeting is scheduled for Friday.
“Causing a payment default”
Former Republican President Donald Trump, a candidate for the 2024 election, urged Republican lawmakers on Wednesday to “cause a payment default“, if the Democrats do not concede”massive cuts“. He felt, however, that default would likely be averted, believing Democrats would “to sellon the file.
But Joe Biden’s Minister of Economy and Finance, Janet Yellen, who is US Treasury Secretary, then issued a warning. She felt that the mere fact of flirting with default, pushing negotiations to their limits “can lead to significant economic costs».
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