WASHINGTON: US Secretary of State Mike Pompeo warned on Monday that any potential International Monetary Fund bailout for Pakistan’s new government should not provide funds to pay off Chinese lenders.
In an interview with CNBC television, Pompeo said the United States looked forward to engagement with the government of Pakistan’s expected new prime minister, Imran Khan, but said there was “no rationale” for a bailout that pays off Chinese loans to Pakistan.
“Make no mistake. We will be watching what the IMF does,” Pompeo said. “There’s no rationale for IMF tax dollars, and associated with that American dollars that are part of the IMF funding, for those to go to bail out Chinese bondholders or China itself,” Pompeo said.
The Financial Times reported on Sunday that senior Pakistani finance officials were drawing up options for Khan to seek an IMF bailout of up to $12 billion.
An IMF spokeswoman said: “We can confirm that we have so far not received a request for a Fund arrangement from Pakistan and that we have not had discussions with the authorities about any possible intentions.”
Pakistan is struggling to avert a currency crisis that has presented the new government with its biggest challenge. Many analysts and business leaders expect that another IMF bailout, the second in five years, will be needed to plug an external financing gap.
Pakistan, which already has around $5 billion in loans from China and its banks to fund major infrastructure projects, had sought another $1 billion in loans to stabilize its plummeting foreign currency reserves.
Officials in the Trump administration, including US Treasury Secretary Steven Mnuchin, have criticized China’s infrastructure lending to developing countries, arguing that this has saddled them with unsustainable debt.
The $57 China-Pakistan Economic Corridor, a series of port and rail improvements associated with China’s One Belt One Road infrastructure push, has led to massive imports of Chinese equipment and materials, swelling Pakistan’s current account deficit.
Pakistan has had 14 IMF financing programs since 1980, according to fund data, including a $6.7 billion three-year loan program in 2013.
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Pompeo warns against IMF bailout for Pakistan that aids China
Pompeo warns against IMF bailout for Pakistan that aids China
- “Make no mistake. We will be watching what the IMF does,” Pompeo said in an interview with CNBC television
- Pakistan is struggling to avert a currency crisis that has presented the new government with its biggest challenge
India’s prime minister says it has reached a free trade deal with the EU
- It touches a whopping 2 billion people and is one of the biggest bilateral engagements on commerce
- The timing comes as Washington targets both India and the EU with steep import tariffs
NEW DELHI: Prime Minister Narendra Modi said Tuesday that India and the European Union have reached a free trade agreement to deepen their economic and strategic ties.
The accord, which touches a whopping 2 billion people, was concluded after nearly two decades of negotiations. It was dubbed the “mother of all deals” by both sides.
It is one of the biggest bilateral engagements on commerce. The timing comes as Washington targets both India and the EU with steep import tariffs.
“This agreement will bring major opportunities for the people of India and Europe. It represents 25 percent of the global GDP and one-third of global trade,” Modi said while virtually addressing an energy conference.
The deal comes at a time when Washington is targeting both India and the EU with steep tariffs, disrupting established trade flows and pushing major economies to seek alternate partnerships.
Modi was scheduled to meet with European Commission President Ursula von der Leyen later Tuesday to jointly announce the agreement.
India has stepped up efforts to diversify its export destinations as part of a broader strategy to offset the impact of higher US tariffs.
The tariffs include an extra 25 percent levy on Indian goods for its unabated purchases of discounted Russian oil, bringing the combined tariffs imposed by the United States on its ally to 50 percent.
The deal gives the EU expanded access to one of the world’s fastest-growing major economies, helping European exporters and investors to reduce their reliance on more volatile markets.
Bilateral trade between India and EU stood at $136.5 billion in 2024-25. The two sides hope to increase that to about $200 billion by 2030, India’s Trade Ministry officials said.
“Ultimately, the agreement is about creating a stable commercial corridor between two major markets at a time the global trading system is fragmenting,” said Indian trade analyst Ajay Srivastava.
The EU is still reeling from the aggressive approach of its once-stalwart ally across the Atlantic. There’s a widespread sense of betrayal across the 27-nation bloc from US President Donald Trump’s onslaught of higher tariffs, embrace of far-right parties, and belligerence over Greenland.
Brussels has accelerated its outreach to markets around the world: Over the past year, von der Leyen has signed deals with Japan, Indonesia, Mexico, and South America under the catchphrase “strategic autonomy,” which in practice is akin to decoupling from a US seen by most European leaders as erratic.
“We are showing a fractured world that another way is possible,” she posted on X after arriving in India on Sunday.
The accord, which touches a whopping 2 billion people, was concluded after nearly two decades of negotiations. It was dubbed the “mother of all deals” by both sides.
It is one of the biggest bilateral engagements on commerce. The timing comes as Washington targets both India and the EU with steep import tariffs.
“This agreement will bring major opportunities for the people of India and Europe. It represents 25 percent of the global GDP and one-third of global trade,” Modi said while virtually addressing an energy conference.
The deal comes at a time when Washington is targeting both India and the EU with steep tariffs, disrupting established trade flows and pushing major economies to seek alternate partnerships.
Modi was scheduled to meet with European Commission President Ursula von der Leyen later Tuesday to jointly announce the agreement.
India has stepped up efforts to diversify its export destinations as part of a broader strategy to offset the impact of higher US tariffs.
The tariffs include an extra 25 percent levy on Indian goods for its unabated purchases of discounted Russian oil, bringing the combined tariffs imposed by the United States on its ally to 50 percent.
The deal gives the EU expanded access to one of the world’s fastest-growing major economies, helping European exporters and investors to reduce their reliance on more volatile markets.
Bilateral trade between India and EU stood at $136.5 billion in 2024-25. The two sides hope to increase that to about $200 billion by 2030, India’s Trade Ministry officials said.
“Ultimately, the agreement is about creating a stable commercial corridor between two major markets at a time the global trading system is fragmenting,” said Indian trade analyst Ajay Srivastava.
The EU is still reeling from the aggressive approach of its once-stalwart ally across the Atlantic. There’s a widespread sense of betrayal across the 27-nation bloc from US President Donald Trump’s onslaught of higher tariffs, embrace of far-right parties, and belligerence over Greenland.
Brussels has accelerated its outreach to markets around the world: Over the past year, von der Leyen has signed deals with Japan, Indonesia, Mexico, and South America under the catchphrase “strategic autonomy,” which in practice is akin to decoupling from a US seen by most European leaders as erratic.
“We are showing a fractured world that another way is possible,” she posted on X after arriving in India on Sunday.
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