Finance officials see rising risks to economic recovery

[Lite Beer]

Finance officials see rising risks to economic recovery
By MARTIN CRUTSINGER and HARRY DUNPHY

WASHINGTON (AP) — World finance officials said Saturday they see a number of threats on the horizon for a global economy still clawing back from the deepest recession in seven decades, and a potential Greek debt default presents the most immediate risk.

After finance officials wrapped up three days of talks, the International Monetary Fund's policy committee set a goal of working toward a "more robust, balanced and job-rich global economy" while acknowledging growing risks to achieving that objective.

The Greek finance minister, Yanis Varoufakis, held a series of talks with finance officials on the sidelines of the spring meetings of the 188-nation IMF and World Bank, trying to settle his country's latest crisis.

Mario Draghi, head of the European Central Bank, said it was "urgent" to resolve the dispute between Greece and its creditors.

A default, he said, would send the global economy into "uncharted waters" and the extent of the possible damage would be hard to estimate. He told reporters that he did not want to even contemplate the chance of a default.

Earlier in the week, IMF Managing Director Christine Lagarde had rejected suggestions that her agency might postpone repayment deadlines for Greece. On Saturday, she cited constructive talks with Varoufakis and said the goal was to stabilize Greece's finances and assure an economic recovery and "make sure the whole partnership hangs together" between Greece and its creditors.

In its closing communique, the policy-setting panel for the World Bank expressed concerns about the unevenness of global growth and pledged to work with the IMF to provide economic support for poor nations that have been hit hard by falling commodity prices.

But international aid group Oxfam expressed disappointment that the IMF and World Bank did not devote more time to exploring ways to lessen widening income gaps.

"Given that rising inequality continues to make the headlines everywhere in the world, it is surprising how the issue remained almost totally absent from these spring meetings," said Nicolas Mombrial, head of the Washington office of Oxfam International.

Greece is in negotiations with the IMF and European authorities to receive the final 7.2 billion euro ($7.8 billion) installment of its financial bailout. Creditors are demanding that Greece produce a credible overhaul before releasing the money.

The country has relied on international loans since 2010. Without more bailout money, Greece could miss two debt payments due to the IMF in May and run out of cash to pay government salaries and pensions.

Fears that Greece could default and abandon the euro currency group sent shockwaves through global markets Friday. After being down nearly 360 points, the Dow Jones industrial average recovered a bit to finish down 279.47.

U.S. Treasury Secretary Jacob Lew said that a Greek default would "create immediate hardship" for Greece and damage the world economy.

In a speech Saturday to the IMF panel, Lew urged South Korea, Germany, China and Japan to do more to increase consumer demand in their own countries instead of relying on exports to the United States and elsewhere for growth.

"We are concerned that the global economy is reverting to the pre-crisis pattern of heavy reliance on U.S. demand for growth," Lew said. "As we all know, such a pattern will not lead to strong, sustainable and balanced global growth."

The negotiations over Greece's debt have proved contentious but all sides have expressed optimism that the differences can be resolved.

A number of countries directed criticism toward the U.S. for the failure of Congress to pass the legislation needed to put into effect IMF reforms that would boost the agency's capacity to make loans and increase the voting power of such emerging economic powers as China, Brazil and India.

Agustin Carstens, the head of Mexico's central bank and the chair of the IMF policy panel, said that "pretty much all of the members expressed deep disappointment" that a failure of Congress to act is blocking implementation of the reforms. The IMF panel directed IMF officials to explore whether any interim reforms could be put into effect pending congressional action.

The finance ministers urged central banks including the Federal Reserve to clearly communicate future policy changes to avoid triggering unwanted turbulence in financial markets.

Lagarde told reporters Saturday that the Federal Reserve had made it clear that it planned to "always communicate and help everybody anticipate" its future moves on interest rates.

Fed Chair Janet Yellen along with Lew represented the U.S. at the finance meetings.

___

Associated Press writer Luis Alonso contributed to this report.

-- (c) Associated Press 2015-04-19

[MaxLee]

Finance officials see rising risks to economic recovery

In other words, we got your money,.... not our problems...

[ggold]

in time the US and the IMF will both lose their financial influence on the global Markets, with China forming their version of the IMF and other nations eager to join against the wishes of the US.

It has always been the US that has lead the world into financial difficulties, their version of capitalism just doesn't work, The US haven't been able to lead the world out of this last recession. I doubt Obama's antics have helped much with Allies who wonder what is the US about these day!

The world is moving away from the dollar being the number one currency.

[impulse]

in time the US and the IMF will both lose their financial influence on the global Markets, with China forming their version of the IMF and other nations eager to join against the wishes of the US.

It has always been the US that has lead the world into financial difficulties, their version of capitalism just doesn't work, The US haven't been able to lead the world out of this last recession. I doubt Obama's antics have helped much with Allies who wonder what is the US about these day!

The world is moving away from the dollar being the number one currency.

If you didn't like the USD, you'll be thrilled with the RMB.

No idea how many are in circulation (state secret with prison sentences for anyone who releases the information- even if they did know), virtually impossible for most of us to get reasonable amounts into or out of the country, tight limits on how much an individual or normal company can trade in a year, virtually no history to lend credibility for its use as a reserve currency, backed by the full faith and credit of a government that has consistently reneged on agreements with foreign companies and countries.

Yep, I want me some of that...

Edited April 19, 2015 by impulse

[SheungWan]

in time the US and the IMF will both lose their financial influence on the global Markets, with China forming their version of the IMF and other nations eager to join against the wishes of the US.

It has always been the US that has lead the world into financial difficulties, their version of capitalism just doesn't work, The US haven't been able to lead the world out of this last recession. I doubt Obama's antics have helped much with Allies who wonder what is the US about these day!

The world is moving away from the dollar being the number one currency.

'In time' I hope 'the world' doesn't have to put up with speculative meanderings on ThaiVisa but its downright hell right now.

[Srikcir]

in time the US and the IMF will both lose their financial influence on the global Markets, with China forming their version of the IMF and other nations eager to join against the wishes of the US.

It has always been the US that has lead the world into financial difficulties, their version of capitalism just doesn't work, The US haven't been able to lead the world out of this last recession. I doubt Obama's antics have helped much with Allies who wonder what is the US about these day!

The world is moving away from the dollar being the number one currency.

Meanwhile, as a hedge AGAINST THEIR OWN CURRENCIES, both China and Russia hold large foreign reserves in USDs. It is called, "Talking out of both sides of your mouth."

Edited April 19, 2015 by Srikcir

[chilli42]

It's high time to bite the bullet on irresponsible loans/borrowing. It may or may not be a disaster - uncharted waters. But continuing to gild the lily by covering up the irresponsible spending with even more loans is delaying everyone form taking the actions that need to be taken to get back to sustainable economic growth. let the cards fall where they may, mankind has survived worse. Perhaps it's simply the bankers that have the most to lose.

[englishoak]

Boy do these monkeys talk out of their rear ends.

Greece has defrauded billions it could never afford, its widely expected to default and has already anyway more than once under other words, greek debt is already factored in and its just high risk money making these waves, they knew the gamble. If the world has to worry about a little Greek debt it may as well pack it all in now. Makes me laugh, we print trillions out of thin air, it all goes into the stock market inflating stock values well beyond reality by totally ridiculous gains then panic when it drop a few hundred points. Like its not been all false economic growth to begin with.

Im not rooting for it to all go south in Europe but i fear the only way a proper lesson will be learnt is with total economic disaster. The sooner the better imo then my kids might have a slim chance of an affordable life.

[NeverSure]

in time the US and the IMF will both lose their financial influence on the global Markets, with China forming their version of the IMF and other nations eager to join against the wishes of the US.

Yes, I can see Europe doing that, totally. After all it bought into the EU and the Euro and loaned a bunch of money to Greece. What could possibly go wrong by investing in a bunch of RMB or Rubble?