In the US, there is still no agreement between Democrats and Republicans in Congress over the timetable for increasing US borrowing authority, despite an emergency meeting of congressional leaders with the President at the White House.
President Barack Obama called the meeting with congressional leaders on Saturday after talks aimed at avoiding a US default by raising the federal debt limit collapsed on Friday .
The meeting, attended by Vice-President Joe Biden, House speaker, Republic John Boehner, House Minority leader Nancy Pelosi, Democratic Senate Majority leader Harry Reid and Senate Republican leader Mitch McConnell, lasted less than an hour.
The BBC reports that the congressional leaders were unsmiling when they left the meeting and avoided reporters.
Despite instructions from President Obama to produce a budget plan by Monday that would clear the way for Congress to raise the $US14.3 trillion debt ceiling by 2 August, the Republicans and Democrats have escalated their fight.
Senate Democratic leader Harry Reid said Republican intransigence was pushing them to the brink of a default .
The latest flare-up centered around a Republican plan being proposed behind closed doors calling for two installments of debt limit increases and deficit reduction.
Democrats said they only wanted to extend the debt limit once through the 2012 election year.
Democrats insist upon tax increases as part of deficit reduction and fear that under the Republican plan they would be put off until 2012, in the midst of presidential and congressional re-election campaigns, or may be never happen.
Michael Steel, a spokesman for House Speaker John Boehner, the top Republican in Congress, said that a two-step process is inevitable. He also reiterated that a default is not an option.
The federal government's authority to borrow money is limited by statute.
If the US fails to meet the deadline, the Treasury could run out of money to pay all of its bills.
The BBC reports this could lead to interest rate rises, threaten the economic recovery in the United States and in turn the global recovery.