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 Managing Director Christine Lagarde holds a press conference October 11, 2012 at the Tokyo International Forum in Toyko, Japan. (IMF Staff Photograph/Stephen Jaffe)
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
Why Your Ongoing Support Is Essential
Donald Trump’s attacks on democracy, justice, and a free press are escalating — putting everything we stand for at risk. We believe a better world is possible, but we can’t get there without your support. Common Dreams stands apart. We answer only to you — our readers, activists, and changemakers — not to billionaires or corporations. Our independence allows us to cover the vital stories that others won’t, spotlighting movements for peace, equality, and human rights. Right now, our work faces unprecedented challenges. Misinformation is spreading, journalists are under attack, and financial pressures are mounting. As a reader-supported, nonprofit newsroom, your support is crucial to keep this journalism alive. Whatever you can give — $10, $25, or $100 — helps us stay strong and responsive when the world needs us most. Together, we’ll continue to build the independent, courageous journalism our movement relies on. Thank you for being part of this community. |
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.