US possible "economic collapse in some countries" in case of inaction on the debt, according to the IMF
Student debt borrowers are not ready for repayment to resume: How to avoid looming crisis
Borrowers are not ready to start repaying their debt: 89 percent do not feel financially secure enough to resume payments in a few months." This reality is coupled with surging inflation at 30-year highs. Consumer goods cost 6.2 percent more in October than they did one year before.This gives the government two choices: extend the pause, which would seriously undermine its credibility, or let the repayments resume and face the consequences of millions of borrowers in financial distress with a significant portion defaulting.
The alert is serious. The International Monetary Fund prevails, on Thursday, December 2, that an economic collapse is not excluded in some countries if the G20 does not act quickly on the debt.
warned Thursday, December 2, that "economic collapse in some countries" is not excluded if the G20 does not act urgently in pandemic that is still Not under control.
"We could see an economic collapse in some countries unless G20 creditors do not accelerate debt restructuring and suspend debt service while restructuring are being negotiated" , consider The Director General of the IMF Kristalina Georgieva and Ceyla Pazarbasioglu, Director of the Fund's strategy, in a publication Thursday on a blog.
On The Money: Schumer, Warren call on Biden to extend student loan pause | IMF estimates 6 percent global growth this year
Happy Tuesday and welcome back to On The Money. I'm Sylvan Lane, and here's your nightly guide to everything affecting your bills, bank account and bottom line.See something I missed? Let me know at email@example.com or tweet me @SylvanLane. And if you like your newsletter, you can subscribe to it here: http://bit.ly/1NxxW2N.Write us with tips, suggestions and news: firstname.lastname@example.org and email@example.com. Follow us on Twitter: @SylvanLane and @NJagoda.THE BIG DEAL-Schumer, Warren call on Biden to extend student loan pause and wipe out $50K per borrower: Senate Majority Leader Charles Schumer (D-N.Y.), Sen. Elizabeth Warren (D-Mass.) and Rep. Ayanna Pressley (D-Mass.
60% of low-income countries exposed to this
risk at the beginning of the pandemic, the rich G20 countries had offered poor countries a moratorium on the payment of the service of their debt until the end of the year before prolong to the end 2021.
in parallel with this debt service suspension initiative (DSSI), in November 2020, they had created an "common framework" to restructure or even cancel the debt of the countries which would request it.
But for the time, private creditors, in particular Chinese, slow its implementation. "It is essential that the private sector creditors implement debt relief under comparable terms", highlights those responsible for the Washington Institution.
Despite the assistance measures deployed since the beginning of the pandemic, "about 60% of low-income countries are exposed to high risk or are already over-indebted. , they recall.
In 2015, this number was less than 30%, they point out.
The fear of the Omicron
variant "For many of these countries, the difficulties accumulate" , add the managers, observing that the arrival of new variants may further disrupt economic activity.
"The recent (Variant) Omicron is a brutal reminder that the pandemic will be with us for a while", also write, urging an "multilateral action", "right now to combat inequalities in matter Vaccines on a global scale and also to support the rapid and ordered settlement of the debt ".
Mitch McConnell Confident He Can Get 10 Republicans to Back Him, Others Aren't So Sure .
Some Republican senators have voiced their opposition to allowing Democrats to raise the debt ceiling.McConnell reached an agreement with Senate Majority Leader Chuck Schumer (D-NY) to let Democrats raise the debt limit with Republican votes through a one-time process.