Christine Lagarde on Sovereign Debt, Growth and Social Instability


by iMFdirect

The IMF chief gave a speech in New York City today that sets out how the IMF can help countries tackle this troika of challenges to the global economy.

 Watch the speech

 

Between a Rock and a Hard Place: U.S. Fiscal Policy


By Rodrigo Valdés

(Versions in عربي,  中文日本語EspañolFrançaisРусский)

The United States faces two pressing challenges to fiscal policy: raise the debt ceiling, and begin the arduous process of reducing deficits and debt.

And, right now, this leaves U.S. fiscal policy between a rock and a hard place. How much savings should be found and in what form are crucial questions. So is when to put those savings in effect. Continue reading

Euro Muscles in Brussels: Christine Lagarde on Greece


by iMFdirect

The head of the IMF Christine Lagarde was clear during her press conference in Brussels yesterday—European leaders’ deal to help Greece and the euro area is a very constructive and comprehensive package of measures to resolve debt problems.

“What to me is critical—really a game-changing decision—is the leaders’ commitment and determination to provide support to countries until they have regained market access, provided that they successfully implement their programs.”

Watch the press conference:

The 17 heads of state of the eurozone have agreed to provide €109 billion in fresh financing for Greece. Together with voluntary contributions from the private sector and continued support from the IMF, this will close the financing gap in Greece’s budget and give the country the breathing room it needs to restore growth and competitiveness.

Greece has not yet requested a new program from the IMF, but Lagarde said it was the global lender’s intention to be an active participant in helping Greece restore growth, debt sustainability and return to financial markets.

The European leaders also agreed to make the terms of the European Financial Stability Facility more flexible, a measure called for by the IMF in its recent assessment of the euro area.

“This flexibility is a key element, in the view of the IMF,” said Lagarde.

The Solution Is More, Not Less Europe


By Antonio Borges

(Versions in عربي,  中文, 日本語EspañolFrançais)

It is hard to hold the course in the middle of a storm, but European policymakers need to if they want European integration to succeed. The sovereign debt crisis is a serious challenge, which requires a strong and coordinated effort by all involved to finally put it behind us.

Surviving the storm will be of little consequence if the euro area finds itself trapped in the perpetual winter of low growth. Germany may be expanding at record speed right now, but it wasn’t so long ago when it grew much more slowly—just 1.5 percent per year between 1995 and 2007. In contrast, Sweden grew by 3 percent a year and the United States by 2 percent during the same period.

Many experts fear that without reforms, growth in Germany could drop even lower in the next 5‑10 years and beyond when global trade cools again. The situation is worse in the countries that currently find themselves in the eye of the storm.

Continue reading

No Country is an Island: Ireland and the IMF


by iMFdirect

Speaking to the pain and anger of the Irish people at the toll the economic adjustment has taken on their daily lives, the IMF’s mission chief Ajai Chopra was clear during a press conference today in Dublin:  the end goal is to protect the poor and most vulnerable people in society while restarting the economy.

“We would all agree the key objective is to get growth going again, to create jobs, and bring down unemployment and that will be the true mark of success,” said Chopra.

Continue reading

Beyond Growth: the Importance of Inclusion


By Antoinette Sayeh

(Version in  Français)

Economists care about growth.  Governments care about what it can achieve:  more jobs and more income for more people.  An increasing number of African countries have been growing robustly for more than a decade. But while growth is a necessary condition for poverty reduction and employment creation, is it also sufficient?

When growth first takes off, it is typically associated with steady progress in several dimensions of poverty reduction: incomes rise and countries are able to finance more spending on health and education, which translates into much-needed progress toward the Millennium Development Goals. But after this initial spurt, other questions arise. In particular, a number of countries are increasingly concerned about how inclusive growth is; are the benefits well-spread or do they accrue only to the few? Continue reading

No Time to Waste: IMF Managing Director Christine Lagarde


by iMFdirect

The IMF’s managing director Christine Lagarde gave her first press conference today, in which she outlined three focal issues for the institution:

Our analysis of the connections between and among countries’ economies and financial sectors

The credibility of our analysis to countries must be candid and evenhanded

A comprehensive approach to our work that includes employment and social issues to help create stable economies.

Lagarde told the assembled reporters she had arrived in Washington soon after her selection because “there are many issues to address that cannot wait for a summer holiday.”

In an interview the day before, Lagarde said sovereign debt and capital flows were two of the main challenges facing the global economy.

Have a look: 

 

 

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