Lagarde says 'fiscal cliff' threatens US supremacy

IMF chief Christine Lagarde said Friday the looming "fiscal cliff" in the United States threatens the country's international supremacy and the fragile global recovery.

In an interview with BBC World News, Lagarde noted the US fiscal cliff, a combination of severe tax increases and spending cuts due in January, would probably wipe out growth in the world's largest economy.

"The real issues are, in a way, the supremacy of the United States and its leadership role in the world," said the managing director of the International Monetary Fund.

"To make sure that that leadership endures, the uncertainty has to be removed because uncertainty fuels doubt as to that leadership."

With the deadline fast approaching, President Barack Obama and congressional Republicans remain at loggerheads in talks to find a longer-term deficit reduction plan that would avert the cliff.

"It's not purely a political issue, it's not ideological, it's broader than that. It really addresses the role of the United States in the world from a geopolitical and economic point of view," said Lagarde, according to extracts of the broadcast interview.

International Monetary Fund (IMF) Managing Director Christine Lagarde gives a speech in November 2012 in Paris. Lagarde said the looming "fiscal cliff" in the United States threatens the country's international supremacy and the fragile global recovery.

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