The IMF compared the US struggle with the threat of default to the fairy tale “Cinderella”

Washington will be able to avoid default, which threatens the country against the backdrop of reaching the ceiling of public debt. About this during a speech at the Qatar Economic Forum stated Head of the International Monetary Fund (IMF) Kristalina Georgieva.

According to her, “history says” that the United States will make efforts to combat the default that threatens them.

“Cinderella is due to leave the ball at exactly midnight. We’ve come to this point, so before our carriage turns into a pumpkin, can we please fix this problem?” Georgieva noted, emphasizing that the world is facing “not just the loss of a shoe.”

The head of the IMF recalled that the US Treasury’s bond market is “the anchor of the stability of the global financial system.” In the event that this anchor is pulled, the ship, by which Georgieva understands the world economy, may find itself “in restless and, even worse, uncharted waters.”

She added that the downturn in the US economy would also have a negative impact on economies around the world.

Earlier, the official representative of the Russian Foreign Ministry, Maria Zakharova, also ironically compared the US attempts to fight the default with a fairy tale. According to her, the States are very similar to the “kingdom of crooked mirrors.”

The threat of default in the US

In January, the United States exceeded the $31.4 trillion ceiling on public debt, which forced the Treasury to use emergency measures to continue financial operations. US President Joe Biden has repeatedly demanded an expansion of debt limits without conditions. Republicans, who control the lower house of Congress, attribute the increase in the ceiling to the adoption of a program of radical budget cuts, which the White House does not agree with.

If lawmakers don’t agree to raise the ceiling soon, and the government exhausts its borrowing capacity by early June, it threatens to halt payments that millions of Americans rely on. According to Moody’s Analytics experts, the macroeconomic consequences of a default could be catastrophic for stock exchanges and economies of different countries, and draw analogies with the 2006 crisis. Analysts believe that under such a scenario, the United States GDP will decrease by 4%, about 6 million people may lose their jobs. But experts consider such a negative scenario unlikely.

Nevertheless, US Treasury Secretary Janet Yellen warned that the deadline for raising the debt ceiling is the first half of June.

US President Joe Biden during a press conference at the G7 summit in Hiroshima said that the default could be “provoked” by the Republicans. At the same time, the owner of the White House is studying the possibilities in order to avoid default on debt obligations.