IMF chief Christine Lagarde sent a chilling message to the world today – we all face a 1930s moment if we don’t come together and help the floundering European countries. She says $1 trillion would be needed to stave off a deeper crises, half of which would come from fund backers such as Australia. "This is a defining moment," she said. "It is not about saving any one country or region. It is about saving the world from a downward economic spiral."
My first reaction is, why should we help out European countries like Greece who spent all their money living it up and to hell with tomorrow? Greek creditors have begged European officials who rejected their bond swap offer to come up with a solution to save Greece from falling into default and it looks like we, along with the rest of the world, will have to support it.
She suggests that countries like Australia could easily afford higher deficits and we should go into more debt rather than cut back if the world turned down. Oh really Ms Lagarde, easy for you to say. Mr Swan agreed and said no country would be immune from the global threats it identified.
Joe Hockey said that if the IMF asks Australia for more money "The government must explain to taxpayers whether it would be in Australia's national interest to contribute, and from where it plans to fund any such contribution".
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