ECB's Draghi says long US debt standoff could cause damage

October 10, 2013

NEW YORK, Oct 10 (Reuters) - European Central Bank President Mario Draghi said on Thursday that a prolonged U.S. debt standoff could hurt the global economy.

A debt impasse lasting for weeks or even months could cause "severe damage" to the U.S. and global economies, said Draghi, speaking before the Economic Club of New York ahead of attending the weekend meetings of the International Monetary Fund and World Bank in Washington.

The U.S. federal government has been largely shut down this month as Republicans in Congress want to undermine President Barack Obama's signature healthcare act as a condition of funding government operations.

In addition, the U.S. government is expected to hit its borrowing limit by Oct. 17 but a divided Congress might prove unable to raise that ceiling. That, in turn, raises the specter of a default.