Democratic and Republican negotiators reached an agreement Saturday A deal to resolve the debt ceiling crisisIt renews hopes for an immediate end to the world’s biggest economy risking its debt default.

U.S. President Joe Biden welcomed the deal to raise the federal government’s debt ceiling by $31.4 trillion, saying it represented a “significant step forward” and consensus, while protecting top priorities for Democrats.

“The agreement reflects consensus, which means that not everyone can get what they want,” he said in a statement.

For his part, McCarthy wrote on Twitter, “I spoke with the President on the phone. After months of him wasting time and refusing to negotiate, we have reached an agreement in principle that the American people deserve.”

The deal raises the debt ceiling for two years and cuts spending over the same period. These include restoring unused Covid-19 funding and speeding up the approval process for some energy projects and some additional business regulations for food assistance programs for poor Americans.

If a deal is passed in Congress before the Treasury Department finds the money to cover all of its obligations, the country will avoid destabilizing debt. The Treasury Department warned Friday that could happen if the debt ceiling is not raised before June 5.

“A Breakthrough for Financial Markets”

After several meetings between the two at the White House, the Biden and McCarthy teams held very long negotiating sessions.

The initial deal that ended on Saturday was a breakthrough for financial markets, which did not see a panic move as a result of the issue, but their patience was running out.

A last minute solution is often reached in such files.

Credit rating agency Fitch put the US rating on “AAA” watch, saying failure to reach an agreement would “send a negative signal in terms of governance”.

The director general of the International Monetary Fund, Kristina Georgieva, said the global economy, already plagued by “great uncertainty”, was “vital” to these tense discussions.

The deal must be ratified by the Democratic-controlled Senate and House of Representatives, where conservatives hold narrow majorities.

Some progressives in the Democratic Party and members of Congress in the Republican Party have threatened to either not ratify the deal or delay it as long as possible if it makes too many concessions in favor of the opposing camp.

Republican Rep. Bob Goode said Saturday that “no member of Congress from the conservative camp can justify a positive vote” based on what he was told of the deal.

France 24/Reuters/AFP