US President Obama signs fiscal cliff deal
By Stephanie Griffith ,AFPWASHINGTON -- U.S. President Barack Obama signed the fiscal cliff deal into law, averting a financial crisis with global repercussions, but the IMF, rating agencies and analysts warned that the critical problem of deficits and debt still hang over the U.S. economy.
January 4, 2013, 12:02 am TWN
Financial markets turned cool toward the last-minute agreement Thursday, in contrast to the initial stocks surge which had greeted the deal Wednesday.
London's benchmark FTSE 100 index of top companies dipped 0.14 percent to 6,019.16 points in late morning deals, Frankfurt's DAX 30 index dropped 0.27 percent to 7,757.51 points and the Paris CAC 40 fell 0.54 percent to 3,713.64.
All three indices had surged by more than two percent on Wednesday, in a bright start to 2013, after U.S. lawmakers agreed on a deal to avert the so-called fiscal cliff.
In New York, the S&P 500 index had its best day of trading in more than a year Wednesday, closing more than 2.5 percent to the good.
The White House said in a statement that Obama had signed the bill late Wednesday, marking the culmination of weeks of high-stakes talks with lawmakers in Congress.
The agreement averted across-the-board tax hikes and automatic spending cuts which some had feared could have tipped the U.S. economy back into recession.
But then the International Monetary Fund, while welcoming the agreement for averting dire effects on the economy in the short term, warned that the underlying problem of hugely over-stretched public finances remained.
“More remains to be done to put U.S. public finances back on a sustainable path without harming the still fragile recovery,” warned IMF spokesman Gerry Rice.
“Specifically, a comprehensive plan that ensures both higher revenues and containment of entitlement spending over the medium term should be approved as soon as possible.”