The US have to be “mature” within the negotiations on the debt ceiling, says Germany’s politician Lindner on the G-7 summit
German Treasury Secretary Christian Lindner hopes US lawmakers will be “mature” in debt ceiling negotiations to avoid further headwinds for the global economy.
The US Congress is trying to find a compromise on the debt limit – which refers to the maximum amount that both houses of the federal government will allow for borrowing. Democratic leaders want the cap raised, but Republican lawmakers are demanding spending cuts be agreed before anything is approved.
Time is running out for a deal, and US Treasury Secretary Janet Yellen warned earlier this month that the world’s largest economy could default by June 1 without a deal.
“There is a high level of uncertainty, we must stabilize economic development, we must continue to fight inflation and in this situation everyone must take responsibility, we must avoid further risks, especially risks that we can decide for ourselves.”, said German Finance Minister Christian Lindner on the sidelines of a G-7 meeting in Japan.
“I can’t comment on domestic politics in other countries, but I hope everyone in this situation will mature and avoid further risks to global economic development,” he told CNBC’s Martin Soong.
Yellen said earlier Thursday at a news conference, also at the G-7 meeting, that a US default would pose a threat to the global economy. US President Joe Biden had previously warned that differences with the Republican Party over the debt ceiling threatened a recession.
“We have big risks, a high level of uncertainty, we still have high inflation rates, we haven’t returned to the growth we need on a global scale, and therefore in this situation nobody would understand if US domestic policy would lead to that.” “That will cause even more trouble for the global economy,” said Lindner.
Eurogroup President Paschal Donohoe also told CNBC at the G-7 meetings that this is a “vital” development for the global economy. “We know how sensitive this issue is in American politics, but at the same time, solving this issue is not only crucial for America, but also plays such a crucial role in the economic stability of our world,” he said.