ECONOMY

Christine Lagarde: IMF ready to resume Egypt loan talks

Christine Lagarde, managing director of the IMF, told Al Arabiya that the fund is ready and willing to restore talks with the Egyptian authorities.

The International Monetary Fund (IMF) is ready to resume talks with Egypt over a $4.8 billion loan designed to help rebuild the nation’s struggling economy.

Loan talks first commenced shortly after the ouster of Hosni Mubarak, but have since faced many stumbling blocks. Egypt recently halted negotiations after three Gulf states pledged $12 billion in aid after the army overthrew former president Mohammad Mursi.

Christine Lagarde, managing director of the IMF, told Al Arabiya that the fund is ready and willing to restore talks with the Egyptian authorities.

“The IMF is not only prepared but very keen to engage with the Egyptian authorities, for the benefit and for the good of the Egyptian people,” she said.

Lagarde underlined the importance of economic reform in boosting Egypt's ailing economy.

“I think it will take cooperation, with a focus on the economic reforms that will put the country back on its feet,” she said.

Key to this is Egypt's access to global markets, the reduction of its fiscal deficit, and allocating public spending on essential projects, Lagarde said.

She added that the IMF had undertaken 18 months of “technical” preparations in negotiating the loan before July, when Mursi was overthrown.

Shutdown issue

Lagarde, speaking to Al Arabiya’s Senior Business News Presenter Lara Habib, also addressed the issue of the U.S. federal government shutdown and credit ceiling.

The IMF chief said that resolving the shutdown was ‘mission critical’ and should be resolved as “quickly as possible” due to its impact on the U.S. and global economy.

However, she added that the IMF would not suggest how the shutdown should be addressed, as the organization does not take a political stance.

“The longer it lasts, particularly the issue of [the] debt ceiling, the more serious and the more negative it is going to be,” Lagarde said during the annual meeting of the IMF in Washington.

In addition to the U.S. government shutdown, global economies face several other threats, she added, including the general fiscal situation of the United States, the potentially “dire” consequences of “ill-advised” tapering of unconventional monetary policy, disagreements within the EU and an “unwillingness” for discussions on a proposed European banking union.
 

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Last Update: Monday, 14 October 2013 KSA 23:31 - GMT 20:31
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