The consequences of a US bankruptcy are dire

European Central Bank President Christine Lagarde said she did not think the United States would default on its debt, noting that such an outcome would have dire consequences around the world.

“I have great confidence in the United States,” Lagarde said in an interview with CBS on Sunday. “I can’t believe they would allow such a major disaster to happen,” he added.

“If that happens, it will have a very negative impact not only on this country, as trust will be challenged, but on the entire world,” he added. “I understand politics, I have also been involved in politics. But there comes a time when the supreme interest of the nation must prevail.”

Lagarde’s comments come as the United States grapples with a possible default that could send the global economy into turmoil. Concern was heightened by the standoff over raising the US debt ceiling.

President Joe Biden’s administration insists there will be no debt ceiling negotiations with House Speaker Kevin McCarthy.

House Republicans are seeking to link the cap increase to cutting US spending.

The US Treasury is taking emergency action to avoid breaching the debt ceiling, but the ceiling must be raised this summer to avoid default. McCarthy is scheduled to address the New York Stock Exchange on Monday.

The situation is similar to 2011 when Standard & Poor’s downgraded the credit rating of the USA. Then, to end the crisis, President Barack Obama approved more than $2 trillion in spending cuts. dollars over a decade.

With information from Bloomberg