French finance minister welcomes US debt deal

French Finance Minister Francois Baroin welcomed on Monday a deal reached overnight to increase the US debt ceiling and avoid a potentially catastrophic default.

“Everything that has been put into place in the past two or three weeks — the eurozone agreement on Greece, the deal in Washington on the US debt — move in the right direction … of reinforcing global growth,” Baroin said on France Inter radio.

President Barack Obama late Sunday announced a deal with congressional leaders to raise the legal level of US debt, but the measure must still be approved by lawmakers in both houses of the US Congress.

Lawmakers were expected to vote on the measure as soon as Monday, ahead of a US government cash crunch on Wednesday.

Although the US government hit its debt limit on May 16, it has used spending and accounting adjustments as well as higher-than-expected tax receipts to continue operating normally, but the Treasury has warned it can do this only through August 2.

The failure to reach a deal and a default on its debt by the United States would have considerable consequences for the global economy which is still recovering, warned Baroin.

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