Christine Lagarde: Italy must adhere to the rules of the European Union - Finance and Markets

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Italy, as a member of the European Union, must adhere to the rules of budgetary discipline, said the Managing Director of the International Monetary Fund (IMF), Christine Lagarde.

“When you are a member of a club and have decided to stay in it, you must adhere to its rules”, said Christine Lagarde. She voiced hope that will have difference between the rhetoric of the Italian government, which predicts an increase in the budget deficit of the country that is causing great concern in Brussels, and the final figures.

The IMF Managing Director today supported the interest rate hikes by the US Federal reserve. So she responded directly to US President Donald Trump’s criticism that the Federal Reserve (Fed) “has lost its mind”, heading such monetary policy.

“Such monetary policy is necessary and inevitable for economies like the US, which have steady growth, accelerating inflation and extremely low unemployment”, added Christine Lagarde.

The Fed has to hard monetary policy and is “crazy”, commented Donald Trump last night amid a sharp downturn in the US industrial index, Dow Jones, which lost 3.15% on Wednesday’s trading session.

Christine Lagarde also called on the parties “to use all mechanisms” to resist the consequences of the inevitable outflow of capital against the backdrop of the risks associated with trade-related tensions and rising interest rates. She recommended greater flexibility in flow management, adding that some emerging market economies, including Southeast Asian countries, are not particularly inclined to impose such controls, believing that it should only be applied in exceptional circumstances.

Christine Lagarde has expressed hope that the Chinese authorities are making efforts to maintain economic growth and stability against a backdrop of trade conflict with the United States, but added that this is a “complex” balancing.