Relief as US approves debt deal

WASHINGTON - There has been international relief at a US deal to reopen the government and raise the debt limit, averting the risk of potential default.

China welcomed the deal, and the head of the International Monetary Fund called it "important and necessary".

Markets in Asia rose on Thursday, though in Europe they dipped slightly in early trading.

Congress voted through the deal less than a day before a deadline to raise the $16.7tn (£10.5tn) debt limit.

It followed 16 days of partial government shutdown, which began when Congress failed to agree on a budget by 1 October.

The measure approved in Washington funds the government to 15 January, and extends the Treasury's borrowing authority until 7 February.

The deal, however, offers only a temporary solution and does not resolve the budgetary issues that fiercely divide Republicans and Democrats.

Republicans had sought to restrict President Barack Obama's healthcare reform in return for approving more spending.

But under the bill that was passed, the law commonly known as Obamacare escapes relatively unscathed.

Politicians, bankers and economists had warned of dire global economic consequences unless an agreement to raise the US government's borrowing limit was reached.

But IMF head Christine Lagarde's positive response to the news was tempered by a call for further action.

"It will be essential to reduce uncertainty surrounding the conduct of fiscal policy by raising the debt limit in a more durable manner," she said in a statement.

China was among the countries that had called for a swift resolution to the stand-off.

"This issue concerns many countries in the world,'' Chinese foreign ministry spokeswoman Hua Chunyin said on Thursday.

"The US is the biggest economy in the world. For them to handle the issue properly is to their own interest and beneficial to their own development - we welcome their decision."

In Washington, the Office of Personnel announced that federal government operations were open.

Hundreds of thousands of employees were put on leave without pay during the shutdown.

A Department of Interior letter to employees said: "We appreciate your sacrifices through these difficult times and we understand that the lapse in government activities has imposed hardships on you, your families, and the people we serve."

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