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Commentary

Tue 2 Apr 2019 / Global

Mood set to be downbeat at IMF meetings

The IMF spring meetings will undoubtedly seek to create a positive buzz around policy-makers. But international co-operation may prove to be in short supply. The US is generating global trade tensions and understandably seen as an unreliable leader and partner. China is fighting off its near-term economic malaise at the same time its growth model is facing rising internal contradictions between the state and markets. An introverted Europe is consumed by its own weaknesses. Behind the curtains, the spring meetings are likely to be a downbeat event.

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Fri 29 Mar 2019 / Europe

UK and Germany 'looking beyond abyss'

Germany and Britain are trying to look beyond the abyss to focus on areas for beneficial bilateral co-operation after the UK's planned withdrawal from the European Union. But a debate on 29 March at the Allianz Forum in Berlin was heavily overshadowed by the impasse over departure. Michael Schmidt, president of the BCCG, presenting to the audience the British embassy-OMFIF report on 'UK-German futures', said: 'To find positive concepts about the future is a much happier task than carrying out a separation.'

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Thu 28 Mar 2019 / Global

US proposal may address IMF resources

Behind the scenes in Washington, the US is proposing to double the International Monetary Fund's 'New Arrangements to Borrow', one of the pots from which the Fund draws its overall loanable resources. Under the proposal, IMF quotas will remain unchanged. For Managing Director Christine Lagarde, this would alleviate immediate threats to the Fund's resource base. For European, Japanese and US representatives, it would also postpone the debate about shifts in voting powers to emerging markets.

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Wed 27 Mar 2019

China's secretive lending to Africa

China is secretive about its loans to Ethiopian Airlines. But there are indications that Chinese banks have lent it large amounts. This includes financing of its new terminal at Addis Ababa airport. As part of China's 'going global' strategy, Ethiopia plays an important role as a transport hub in Africa, writes Herbert Poenisch.

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Tue 26 Mar 2019

IMF enhancing efforts in Latin America

While the world focuses on the US and China, Britain's exit from the European Union, G3 monetary policy and Europe's doldrums, little attention is being paid to economic and financial developments in Latin America. Yet, change is afoot. The International Monetary Fund is stepping up activities in the region. Argentina is the Fund's largest engagement. Venezuela's economic collapse looms large over Latin America. From afar, the IMF is making contingency plans, preparing for the day when the country may have a legitimate government.

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Thu 21 Mar 2019 / Global

Next financial crisis may eclipse 2008

It is difficult to forecast when the next global economic recession will happen. It is much easier to predict its severity. Among the more disturbing vulnerabilities of the global economy is the large amount of debt spawned by the years of ultra-unorthodox monetary policy conducted by major central banks in advanced economies. According to the IMF, the global debt to GDP level is 250% – around 30 percentage points higher than it was on the eve of the 2008 financial crisis, and the mispricing of global debt has become much more pervasive.

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Wed 20 Mar 2019

Trump must 'get real on trade'

If Trump's fiscal deficits are not offset by an increase in private savings relative to private investment, increases in the federal deficit will translate into larger trade deficits. Trump will then be responsible for the homegrown trade deficit. It's time for the president to get real on trade, writes Steve Hanke.

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Mon 18 Mar 2019 / Latin America Caribbean

Brazil on rough road to reform

Last month the Brazilian government presented its 'New Social Security' proposal to Congress. The government says the reforms are necessary to spark economic growth, though critics argue the new system would put excessive strain on the poor. President Jair Bolsonaro is resisting negotiations with congressional leaders on the basis of the traditional tit-for-tat that has long prevailed in Brasília, illustrated by the large presence of non-politicians in cabinet and in the leadership of state-owned enterprises and regulatory agencies.

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Thu 14 Mar 2019 / Europe,Global

US must pay greater heed of Brexit

It is tempting for Washington to dismiss the UK’s Brexit crisis as a problem affecting a former imperial power with little relevance to the US. That would be a grave mistake. On Wednesday the House of Commons voted to rule out a no-deal Brexit, and an extension of the negotiations seems probable. A stumbling UK is the last thing that an already challenged European economy needs. At a time of considerable global financial market fragility, it would be in the US economic interest to promote a healthy UK and Europe.

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Thu 14 Mar 2019 / Europe

May's deal will never pass parliament

Assuming the opposition parties maintain their vote against Theresa May's Brexit deal because of the contemptuous way May has treated members of parliament (other than Conservative loyalists), and assuming the hardcore anti-European MPs maintain their faith, the prime minister still does not have the votes to get her deal through in the next two weeks. On 30 March, the UK will still be in the European Union.

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