IMF: the conflict between Obama and Congress around the debt ceiling could lead to a crisis

IMF: the conflict between Obama and Congress around the debt ceiling could lead to a crisis


In the International monetary Fund noted that the opposition of the U.S. Congress and President Obama to raise the ceiling of external debt could result in changes to the financing conditions of loans of the country and affect other countries.

WASHINGTON, 30 Oct. The continued opposition of the legislature of the U.S., represent the majority of Republicans in Congress and the Executive headed by the President-Democrat Barack Obama around the debt ceiling and the Iranian atom could lead to very negative consequences for the economy of the country and the world in General, follows from the analysis of the International monetary Fund (IMF), timed to the upcoming meeting of G-20 leaders.

Previously, Republicans have expressed opposition to Iranian nuclear deal, and also between the parties in Congress have any confrontation over raising the debt limit.

“A political impasse could undermine confidence and cause a sharp increase in sovereign risk Premia (external loans USA — ed.) that may be exacerbated if the peak of this confrontation will coincide with the fed’s decision on increase of rates”, — stated in the review of the Fund. The review began earlier than was enclosed by parliamentary deal on the budget.

The Fund also underlines that the opposition of the Congress and the President to raise the ceiling of external public debt could lead to changes in financial conditions of the loans of the United States, and this, in turn, cause negative side effect in other countries.

The Republican majority in the Senate tried to block the work of the presidential administration-Democrat because of differing approaches to a number of issues. In particular, Republicans strongly disagree with the conclusion of a nuclear deal with Iran. Earlier, the speaker of the house of representatives John Boehner promised to move against her will be put any tools. Blocking of work of the administration through the failure of the budget — was among them.

However, the Senate of the U.S. Congress in the night of Friday after the house of representatives passed a law by which the debt limit will automatically be increased before March 2017. The law also establishes the expenditure for this period with some increase in military expenditure. The law is intended to postpone the budget confrontation between the two parties in Congress until after the next presidential elections and midterm elections to Congress, which will take place in November 2016.

Budget is also a serious blow to both parties on the conservative-libertarian wing of the Republicans, who have repeatedly in the past was able to organize a budget or debt crisis. U.S. President Barack Obama can sign the state budget for 2016 on Monday, said White house press Secretary Josh Ernest.