Yellen of the US Treasury and IMF chief call for multilateral debt solutions | Debt News
Yellen also said the United States “desperately” needed Congress to act on stimulus after a record economic contraction.
US Treasury Secretary Janet Yellen and Head of the International Monetary Fund (IMF) agreed on the need for multilateral solutions to address debt vulnerabilities and other issues facing the global economy, the Treasury Department said. .
Yellen’s call with IMF Managing Director Kristalina Georgieva was the latest in a series of initial appeals with senior global finance officials after he took office last week.
“Secretary Yellen has expressed her intention to work closely with the IMF on the priorities of continuing to respond effectively to the COVID-19 pandemic, relaunching economic growth to support a strong global recovery, addressing the inequalities and to fight forcefully against the threat of climate change. “the Treasury said in a statement.
Georgieva, in a tweet, called the call “warm and productive.”
“We agreed that tackling the pandemic, stimulating growth, tackling income inequality and tackling climate change are top priorities, and that the global commitment to support low-income countries is essential, ”Georgieva wrote on Twitter. “2021 is a critical year for action!
No further details were immediately available.
External experts and world economic officials say they see a growing consensus on the need for a new allocation of Special Drawing Rights (SDRs) from the IMF, a move similar to a central bank printing money, which has been blocked by Yellen’s predecessor, Steven Mnuchin.
Georgieva had called for such a move at the start of the pandemic, but the Trump administration blocked it, arguing that it would provide very little funding to countries that needed it most since the drawing rights are distributed according to the shareholding structure of each country.
The administration of US President Joe Biden has signaled its support for a new SDR allocation and legislation to support such a move is making its way through the now Democrat-controlled Congress.
Need help “desperately”
Separately, Yellen said the new Congressional Budget Office (CBO) growth forecast showed the United States “desperately” needed Congress to act on Biden’s proposed coronavirus bailout.
“Last year the economy contracted more than any since the end of World War II. With the growth the CBO projects, it will be years before the country reaches full employment again, ”Yellen said in a statement, released Tuesday after speaking with Senate Democrats about the US bailout. proposed by Biden of $ 1.9 trillion.
The CBO updated its forecast on Monday to show new, more optimistic gross domestic product growth projections for 2021, but a full recovery in employment to pre-pandemic levels will not take place until 2024.
Yellen plans to hire David Lipton, an economist who was Georgieva’s deputy until February 2020, as a senior adviser, six sources familiar with the matter told Reuters news agency on Tuesday.
Lipton will focus on the role of the United States within the Group of Seven advanced economies and the broader Group of 20 economies in a temporary role, multiple sources said on condition of anonymity.