SUBSCRIBE TO OUR FREE NEWSLETTER
Daily news & progressive opinion—funded by the people, not the corporations—delivered straight to your inbox.
5
#000000
#FFFFFF
5
#000000
#FFFFFF
IMF Backpedals on Austerity
IMF head Christine Lagarde issues shift, says sometimes it's better to "go a little bit more slowly"
Oct 11, 2012
The draconian austerity measures issued to debt-stricken countries should be eased, the head of the International Monetary Fund admitted on Thursday, marking a shift in the policies the "troika" member has been pushing.
Speaking in Tokyo at the annual IMF/World Bank meetings, IMF managing director Christine Lagarde said, "What we have observed is that when many countries at the same time adopt the same austerity measures, it creates a bigger and deeper impact on growth."
Sometimes it's better to "go a little bit more slowly" in implementing the measures, and countries should "let the automatic stabilizers operate," Lagarde stated.
The Telegraph explains further that Lagarde's emphasis is now not on "specific debt reduction targets but focus on implementing reforms."
Lagarde's statements come days after the IMF issued its World Economic Outlook. Reuters reports:
The IMF released new research this week showing that fiscal consolidation has a much sharper negative effect on growth than previously thought. Since the global financial crisis, these so-called fiscal multipliers have been as much as three times larger than they were before 2009, the IMF research shows.
That means aggressive austerity measures may inflict deep economic wounds that make it harder for an economy to get out from under heavy debt burdens.
Financial observer Yves Smith remarks that the IMF now recognizing the failure of these policies is "too little, too late," and "is tantamount to loosening a tourniquet once gangrene has set in."
* * *
The IMF's Christine Lagarde spoke with CNN, explaining the Troika's review of the austerity plan.
IMF chief: Austerity is hurting growth
An Urgent Message From Our Co-Founder
Dear Common Dreams reader, It’s been nearly 30 years since I co-founded Common Dreams with my late wife, Lina Newhouser. We had the radical notion that journalism should serve the public good, not corporate profits. It was clear to us from the outset what it would take to build such a project. No paid advertisements. No corporate sponsors. No millionaire publisher telling us what to think or do. Many people said we wouldn't last a year, but we proved those doubters wrong. Together with a tremendous team of journalists and dedicated staff, we built an independent media outlet free from the constraints of profits and corporate control. Our mission has always been simple: To inform. To inspire. To ignite change for the common good. Building Common Dreams was not easy. Our survival was never guaranteed. When you take on the most powerful forces—Wall Street greed, fossil fuel industry destruction, Big Tech lobbyists, and uber-rich oligarchs who have spent billions upon billions rigging the economy and democracy in their favor—the only bulwark you have is supporters who believe in your work. But here’s the urgent message from me today. It's never been this bad out there. And it's never been this hard to keep us going. At the very moment Common Dreams is most needed, the threats we face are intensifying. We need your support now more than ever. We don't accept corporate advertising and never will. We don't have a paywall because we don't think people should be blocked from critical news based on their ability to pay. Everything we do is funded by the donations of readers like you. When everyone does the little they can afford, we are strong. But if that support retreats or dries up, so do we. Will you donate now to make sure Common Dreams not only survives but thrives? —Craig Brown, Co-founder |
Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.
The draconian austerity measures issued to debt-stricken countries should be eased, the head of the International Monetary Fund admitted on Thursday, marking a shift in the policies the "troika" member has been pushing.
Speaking in Tokyo at the annual IMF/World Bank meetings, IMF managing director Christine Lagarde said, "What we have observed is that when many countries at the same time adopt the same austerity measures, it creates a bigger and deeper impact on growth."
Sometimes it's better to "go a little bit more slowly" in implementing the measures, and countries should "let the automatic stabilizers operate," Lagarde stated.
The Telegraph explains further that Lagarde's emphasis is now not on "specific debt reduction targets but focus on implementing reforms."
Lagarde's statements come days after the IMF issued its World Economic Outlook. Reuters reports:
The IMF released new research this week showing that fiscal consolidation has a much sharper negative effect on growth than previously thought. Since the global financial crisis, these so-called fiscal multipliers have been as much as three times larger than they were before 2009, the IMF research shows.
That means aggressive austerity measures may inflict deep economic wounds that make it harder for an economy to get out from under heavy debt burdens.
Financial observer Yves Smith remarks that the IMF now recognizing the failure of these policies is "too little, too late," and "is tantamount to loosening a tourniquet once gangrene has set in."
* * *
The IMF's Christine Lagarde spoke with CNN, explaining the Troika's review of the austerity plan.
IMF chief: Austerity is hurting growth
The draconian austerity measures issued to debt-stricken countries should be eased, the head of the International Monetary Fund admitted on Thursday, marking a shift in the policies the "troika" member has been pushing.
Speaking in Tokyo at the annual IMF/World Bank meetings, IMF managing director Christine Lagarde said, "What we have observed is that when many countries at the same time adopt the same austerity measures, it creates a bigger and deeper impact on growth."
Sometimes it's better to "go a little bit more slowly" in implementing the measures, and countries should "let the automatic stabilizers operate," Lagarde stated.
The Telegraph explains further that Lagarde's emphasis is now not on "specific debt reduction targets but focus on implementing reforms."
Lagarde's statements come days after the IMF issued its World Economic Outlook. Reuters reports:
The IMF released new research this week showing that fiscal consolidation has a much sharper negative effect on growth than previously thought. Since the global financial crisis, these so-called fiscal multipliers have been as much as three times larger than they were before 2009, the IMF research shows.
That means aggressive austerity measures may inflict deep economic wounds that make it harder for an economy to get out from under heavy debt burdens.
Financial observer Yves Smith remarks that the IMF now recognizing the failure of these policies is "too little, too late," and "is tantamount to loosening a tourniquet once gangrene has set in."
* * *
The IMF's Christine Lagarde spoke with CNN, explaining the Troika's review of the austerity plan.
IMF chief: Austerity is hurting growth
We've had enough. The 1% own and operate the corporate media. They are doing everything they can to defend the status quo, squash dissent and protect the wealthy and the powerful. The Common Dreams media model is different. We cover the news that matters to the 99%. Our mission? To inform. To inspire. To ignite change for the common good. How? Nonprofit. Independent. Reader-supported. Free to read. Free to republish. Free to share. With no advertising. No paywalls. No selling of your data. Thousands of small donations fund our newsroom and allow us to continue publishing. Can you chip in? We can't do it without you. Thank you.