THE spirit of global economic cooperation, first forged in 2008 during the darkest days of the financial crisis, was weakening as the recession gives way to an uneven and shaky recovery, the head of the International Monetary Fund (IMF) said yesterday.
“Many do consider their currency a weapon. That is not good for the global economy… There is no domestic solution to a global crisis,”?said Dominique Strauss-Kahn.
Fears of global currency and trade wars, which were key factors in the Great Depression, have jumped to the top of the agenda at IMF and World Bank meetings this weekend, and are also expected to be a primary topic of discussion when the Group of Seven finance leaders gather today.
These meetings are expected to provide a forum for intense discussions about efforts to persuade China to let its currency rise.
“If one lets this slide into conflict, or forms of protectionism, then we run the risks of repeating the mistakes of the 1930s,” World Bank president Robert Zoellick said yesterday echoing Strauss-Kahn’s fears.