Berita Tren Hari Ini: Sort out your debt crisis or the world will suffer, IMF tells U.S.

The U.S. must find a solution to its debt crisis for the sake of the global economy, the International Monetary Fund said last night.

It issued the ultimatum as the world’s money markets shuddered over the country’s latest failure to reach an agreement to raise its $14.3trillion (£8.8trillion) debt ceiling.

Yesterday Republicans and Democrats were negotiating separately on rival plans to avert a first-ever federal default next week, after joint talks broke down over the weekend.

President Barack Obama said the U.S. would be severely harmed if they failed to raise the debt ceiling in a rare prime-time address to the nation last night

Pressing for tax increases and spending cuts in health care, the IMF warned that the U.S. risked a sudden interest rate rise and humiliating drop in its top-notch credit rating if the deadlock is not broken before next Tuesday’s deadline.

‘These risks would also have significant global repercussions, given the central role of U.S. Treasury bonds in world financial markets,’ the IMF said in a statement. It added that an ‘excessively large upfront fiscal adjustment’ (overly savage spending cuts) should be avoided, because this would further dampen domestic demand and slow growth.

GREEK CREDIT RATING IS SLASHED

Greece suffered fresh ignominy yesterday after it was awarded the lowest credit rating of anywhere in the world.

The stricken nation is now considered a riskier bet than Pakistan and Ecuador after ratings giant Moody’s warned that Athens was ‘virtually 100 per cent’ certain of reneging on its debts.

In the wake of last week’s £96billion rescue package, the agency slashed its score by three notches to a status known as Ca – the lowest rating of any country with international debts and just one point above default.

The agency warned that Greece will continue to be hobbled by a colossal debt pile for years to come.

The Republicans, who control the House of Representatives, are pushing for an aggressive debt-reduction plan with sharp spending cuts but little in the way of tax rises before lending their approval to a deal to lift the ceiling.

But the White House – which cannot borrow without approval from Congress – would prefer a process that raises tax revenues from the wealthy.

U.S. House Speaker John Boehner, the top Republican in Congress, introduced a new plan yesterday to approve an increase in the debt ceiling and said it would be irresponsible for President Obama, a Democrat, to veto it.

In his televised address to the nation last night, Mr Obama warned that if Congress failed to take steps to lift the debt ceiling, it would severely harm the U.S.

He has said he will veto any rise in the debt ceiling that does not go beyond November 2012, drawing criticism that he is trying to put off the problem until after his campaign for a second term. dailymail.co.uk - David Gardner