IMF chief warns countries not to let new decade be repeat of 'roaring 20s'

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By Euronews
IMF chief warns countries not to let new decade be repeat of 'roaring 20s'
Copyright  AP Photo/Jose Luis Magana   -   Jose Luis Magana

The managing director of an international financial institution has warned countries not to let the next decade lead to a financial disaster.

The new International Monetary Fund (IMF) chief, Kristalina Georgieva, compared the new decade starting in 2020 to the 1920s, stating that accelerated growth in the "roaring 20s" ultimately ended in "a financial disaster" otherwise known as the Great Depression.

Georgieva said that although inequality between countries has decreased, there is growing inequality within countries that is "not a good thing."

Speaking to an audience at the Peterson Institute for International Economics in Washington DC on Friday, she called out the United Kingdom where she said the "top 10% control nearly as much wealth as the bottom 50%". She added that inequality was growing in most OECD countries.

A UN poverty expert said in May that austerity cuts in the UK had exacerbated inequality and poverty.

Read more: No expectations? Expert compares UK welfare policy to age of Dickens

Kristalina Georgieva became head of the IMF in October, replacing Christine Lagarde who is now the director of the European Central Bank.

She warned on Friday not to take "financial stability" for granted, as she talked about a new variable: climate change.

"One issue we did not face in the 20s but we do face today ... is climate change. It is a new driver of shocks and uncertainty. It is also a new opportunity for new economic transformation," the IMF head said.

She added: "it is often the poor and the most vulnerable that are most dramatically impacted by climate change and therefore climate change is a force in that conversation of inequality."