Lagarde urges US to follow eurozone 'solution' example
The head of the International Monetary Fund, Christine Lagarde, called on the United States Tuesday to "find a solution" to raising the country's borrowing limit as a debt default looms.
Issued on: Modified:
Largarde said she hoped that a European summit last week which successfully forged agreement on the decisive issue of a new rescue package for Greece would inspire the Americans.
"I hope that this courageous move will be followed as well in the United States, and that fiscal action will be taken as rapidly as possible".
"The clock is irremediably ticking, and people really have to find a solution," the new IMF managing director said in a speech in New York.
"Because frankly to have a default or to have a significant downgrading of the United States signature would be a very, very, very serious event. Not for the United States alone, but for the global economy at large".
If Congress fails to raise the ceiling - a manoeuvre that would enable the federal government to borrow the money it needs to pay civil servants and pensioners and pay the interest on current debts - by 2 August, the resulting economic disaster could include higher interest rates for the US government as well as for consumers.
It could also trigger a ratings downgrade on top-rated US debt.
President Barack Obama and his Democrats cast the blame for the stalemate on the Republicans' refusal to raise the 14 trillion dollar (9.7 trillion euro) debt ceiling unless deep spending cuts can be made without pummelling the wealthy with tax hikes.
Daily newsletterReceive essential international news every morning
Subscribe