Russian energy minister says oil prices may grow in 2017Business & Economy July 24, 17:31
Putin fills in Normandy Four on Russia’s approaches to key Minsk accord provisionsRussian Politics & Diplomacy July 24, 16:57
Normandy Four leaders call for ceasefire in DonbassWorld July 24, 16:29
Archstoyanie: Russia's largest land art festivalSociety & Culture July 24, 16:08
Russian aircraft deliver almost 6,000 strikes on gunmen in Syria in 2 monthsMilitary & Defense July 24, 16:06
FIFA: all collected doping tests at 2017 Confederations Cup in Russia test negativeSport July 24, 15:49
Kremlin refutes ‘fake’ news reports on Russia's alleged funding of anti-fracking activistsBusiness & Economy July 24, 14:54
Russia, EU discuss joint energy projectsRussian Politics & Diplomacy July 24, 14:51
Russia proposes Moscow and Sochi for hosting 2019 World Boxing ChampionshipSport July 24, 14:20
BERLIN, October 7. (Itar-Tass) – If U.S. presidential administration and the republican opposition in Congress fail to reach an agreement regarding the budget for the new fiscal year, it may result in unpredictable consequences for the global economy, said Thomas Straubhaar, director of the Hamburg Institute of International Economics (HWWI) in an interview to the Die Welt newspaper.
“It will have dramatic consequences for all financial markets. American demand will decline; this trend will spread to the global economy,” he said, adding that the crisis may increase the cost of servicing the government debt. In turn, the rising interest rates of United States Treasury security will increase debt servicing cost for a number of EU countries with own economic problems, the expert noted. “This may negate all economic efforts of the Southern Europe. This poses the danger of the Euro crisis coming back,” Straubhaar stressed.
Not all economists share this opinion. For instance, Marcel Fratzscher, president of the Berlin based German Institute for Economic Research (DIW), believes that in the short term, the budget standoff in Washington will not cause ripples in the global economy. “I expect that the argument over budget will not continue for long and will not affect rates of American Treasury securities in the long term,” he noted. In the worst case scenario the debates can weaken only the American economy, Fratzscher said.
Clemens Wüst, head of the Center for European Economic Studies, has expressed his confidence that the ruling Democrats and Republican opposition will find a consensus regarding budget before the confrontation causes “severe consequences for financial markets.”