–Sees Turbulence In Fin Mkts Around The World If Debt Limit Not Raised
By Nacha Cattan
MEXICO CITY (MNI) – Mexico’s Finance Minister Thursday said even if
the United States raises its debt ceiling, that might not stop credit
rating agencies from downgrading the country’s sovereign rating due to
its unbalanced budget.
Ernesto Cordero said the United States has a “very strong” fiscal
imbalance and that it spends more than it has.
“I’m not sure that even if there is budgetary agreement, that the
ratings agencies won’t see a lessening in the credit quality of the
United States,” Cordero said in an interview with local radio program W
Radio.
Cordero said if the debt ceiling is not raised on time, financial
markets around the world will experience turbulence and very strong
uncertainty, including in Mexican capital, stock and exchange markets.
It would also generate an increase in U.S. interest rates, he said.
Apart from these initial impacts, Cordero said “it’s an
unprecedented situation whose consequences are difficult to foresee.”
Mexico has been diversifying exports, among other actions, to
reduce impact of such a crisis, Cordero said. He added that the U.S.
would likely come to a partial agreement that will allow the country to
honor its debt obligations.
Cordero also addressed news reports suggesting he would step down
as finance minister very soon to seek his party’s nomination for the
2012 presidential election. Cordero said his resignation was not
imminent, but he would not say whether it would come before or after the
September 8 deadline to present the government’s 2012 budget proposal.
** Market News International **
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