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Europe Warns U.S. Default Could Trigger Global Recession
Christine Lagarde, managing director of the International Monetary Fund, says a U.S. failure to raise its debt limit by Thursday to avoid defaulting on its loans would trigger a "massive disruption" and the risk of another global recession.
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Christine Lagarde, managing director of the International Monetary Fund, says a U.S. failure to raise its debt limit by Thursday to avoid defaulting on its loans would trigger a "massive disruption" and the risk of another global recession.
Jim Yong Kim, president of the World Bank, agrees. He warns that a U.S. default could trigger "disastrous" higher interest rates, slower growth and waning consumer confidence for developing economies.
European finance ministers expect the U.S. to avert the crisis at the last moment. But BBC News reports they add that every new day of inaction makes the financial community more uneasy.
America's current debt ceiling of $16.7 trillion was set in May after a similar round of political brinksmanship.
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