Tags: IMF | Lagarde | Debt Limit

IMF’s Lagarde: Debt-Limit Failure Will Be a ‘Shock’

Sunday, 10 Jul 2011 09:38 AM


July 10 (Bloomberg) -- Christine Lagarde, the new head of the International Monetary Fund, said failure to find agreement on raising the U.S. debt ceiling will jeopardize global economic stability.

The former French finance minister said today on ABC’s “This Week with Christiane Amanpour” that the IMF is “concerned” and “very much hoping” American lawmakers will compromise on raising the debt limit before an Aug. 2 deadline. She said she expects an agreement, adding that she can’t “imagine for a second” that the U.S. would default.

A default “would be a real shock” to the world’s largest economy, said Lagarde, who took her post July 5. It would cause interest rates to jump, “stock markets taking a huge hit, and real nasty consequences, not just for the United States, but for the entire global economy, because the U.S. is such a big player and matters so much for other countries,”

President Barack Obama is meeting with congressional leaders today to break a partisan impasse over reducing the budget deficit and increasing the government’s $14.3 trillion debt limit. The Treasury Department has said the ceiling must be raised before Aug. 2 to avoid a default.

Asked about the “wounds” at the Washington-based IMF after the arrest and resignation of former chief Dominique Strauss-Kahn, Lagarde described employees’ feelings as “a very strange chemistry of frustration, irritation, sometimes anger, sometimes very deep sadness as well.”

Strauss-Kahn, who faces charges including attempted rape, has pleaded not guilty. Manhattan District Attorney Cyrus Vance Jr. still has to decide whether to drop the prosecution on concern about the credibility of the hotel maid who accused Strauss-Kahn.

Lagarde, 55, was asked to abide by the highest ethical principles and will undergo IMF training next week, she said.

She shared her own rule when it comes to ethics: “I always think to myself: ‘Would my mother approve of that?’ And if she did not, then there’s something wrong.”

© Copyright 2015 Bloomberg News. All rights reserved.

Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
Zip Code:
Privacy: We never share your email.
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

Mali's Islamists Withdraw Cease-Fire Pledge

Friday, 04 Jan 2013 13:06 PM

Tens of thousands of Fatah supporters rallied in the Hamas stronghold of Gaza on Friday for the first time since they we . . .

Fmr. CIA Director Hayden: Iran Nuclear Crisis Gets 'Scarier'

Tuesday, 17 Jul 2012 18:11 PM

 . . .

Join Fmr. CIA Director for Special Iran Briefing, Assess the Danger

Friday, 13 Jul 2012 12:27 PM

 . . .

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

America's News Page
©  Newsmax Media, Inc.
All Rights Reserved