Wednesday, July 27, 2011

IMF urges US to take action on debt

Chief of the International Monetary Fund (IMF) Christine Lagarde

Source: Press TV

The International Monetary Fund (IMF) has urged the United States to take immediate fiscal action regarding its debt crisis, as the country is nearing a default.

Referring to a recent agreement by the European leaders to save debt-ridden Greece, IMF chief Christine Lagarde said, "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," AFP reported.

"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," Lagarde further said during a speech in New York on Tuesday.

This is not the first time the new IMF chief warns the US against the global consequences of a default since she became the managing director of the IMF.

The US hit its borrowing limit of USD14.3 trillion on May 16, and if the limit is not raised by August 2, the US government will default on its debts.

The Democrats and the Republicans are still at odds over how to curb the country's massive debt and reduce its budget deficit.

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