The International Monetary Fund has warned developed nations they face an “urgent” need to cut their budget deficits. Its warning comes as a slew of European countries face public unrest over their attempts to do just that.
European countries saddled with debt should focus on cutting deficits in the wake of policy makers' unprecedented efforts to contain the region's sovereign-debt crisis, said John Lipsky from the International Monetary Fund.
European leaders unveiled an unprecedented loan package worth almost one trillion US dollars and a program of bond purchases in an attempt to bolster the Euro that has become highly vulnerable because of the Greek sovereign-debt crisis.
Leaders of the 16 EU member states that use the Euro have approved a 110 billion Euro loan to Greece to prevent its debt crisis from spreading. European Commission President José Manuel Barroso said the Eurozone would do whatever it took to safeguard Greece's financial stability. In return for the three-year loan, Athens must cut public spending.
A default by Greece on its debt obligations is not and has never been an option, a spokeswoman for the International Monetary Fund (IMF) said on Thursday. A Greek “default is not on the table, has not been on the table” insisted IMF director of external relations Caroline Atkinson.
European Central Bank president Jean-Claude Trichet faced down pressure for new moves to shore up the weakest Eurozone countries, but kept options open even as he said Spain and Portugal were “not Greece”.
IMF Managing Director Dominique Strauss-Kahn will travel to Brazil and Peru from May 25-28 to meet with government leaders, leading figures from the private sector, and with students and academics as part of efforts to engage more closely with stakeholders in the region.
Given the high levels of global liquidity, Argentina should succeed in restructuring its 20 billion US dollars in defaulted bonds according to a senior official from the International Monetary Fund.
The recovery in Latin America and the Caribbean is advancing faster than anticipated but at different speeds across countries, the International Monetary Fund (IMF) said in its latest Regional Economic Outlook-Western Hemisphere report, which was launched Tuesday in Montevideo, Uruguay.
The European Central Bank (ECB) has moved to shore up the €110 billion EU/IMF rescue of Greece by offsetting the impact of the “junk” rating on the country’s debt.