Christine Lagarde: Situation in Ukraine may negatively affect other countries. - The rise of geopolitical tensions could cloud the global economic outlook

International Monetary Fund Managing Director Christine Lagarde warned on Wednesday that the political crisis around Ukraine poses a danger to the broader world economy.
In a speech in Washington, Lagarde said global growth five years after the Great Recession "remains too slow and weak" and faces multiple threats.
For one, low inflation, especially in Europe and Japan, are dangers for demand and output and consequently jobs, Lagarde said at the Johns Hopkins University School of Advanced International Studies.

A second key threat is high corporate leverage in emerging economies, which if not adequately addressed will be worsened by the turmoil from eventual monetary tightening in advanced economies, especially the United States.

• "The third obstacle is the rise of geopolitical tensions, which could cloud the global economic outlook," she said.

• "The situation in Ukraine is one which, if not well managed, could have broader spillover implications."

In addition to Ukraine are other geopolitical problem areas, she added.

• "Resolving them requires not only good policies, but good politics. Both are essential to enable the global economy to move into a higher gear."

• Last week, the IMF announced an ambitious $14-18 billion programme to rescue Ukraine's economy after the overthrow of president Viktor Yanukovich.

Tensions with Russia over its annexation of Ukraine's Crimea region have added to the challenge of stabilising the country.- [AFP/al/channelnewsasia.com]

3/4/14

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• The situation in Ukraine may negatively affect other countries, International Monetary Fund (IMF) managing director Christine Lagarde warned Wednesday.

Speaking in Washington ahead of next week’s spring meeting of the IMF and World Bank governing bodies, Lagarde stressed that “the rise of geopolitical tensions could cloud the global economic outlook”.
“The situation in Ukraine is one which, if not well managed, could have broader spillover implications,” she said.
Other countries also face their own geopolitical problems, Lagarde said.

• “Resolving them requires not only good policies, but good politics,” she said. “Both are essential to enable the global economy to move into a higher gear.”

The political, economic and social situation in Ukraine is far from stable following a coup that occurred in the country in February after violent anti-government protests, which started in November 2013 when the country suspended the signing of an association agreement with the European Union in favor of closer ties with Russia.
President Viktor Yanukovich had to leave the country citing security concerns. Amid riots, new people were brought to power in Kiev.

• The crisis deepened when the Republic of Crimea, where most residents are Russians, held a referendum in which an overwhelming majority of voters decided for Crimea to secede from Ukraine and reunify with Russia. A relevant deal with Moscow was signed on March 18.

In the Soviet Union, Crimea used to be part of Russia until 1954, when Nikita Khrushchev, the first secretary of the USSR’s Communist Party, transferred it to Ukraine's jurisdiction as a gift.
[itar-tass.com]