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WASHINGTON, Oct 9 (Reuters) - The following are highlights of the International Monetary Fund and World Bank meetings on Thursday in Washington, where finance ministers, central bankers and other top officials are gathering.
ON SPILLOVER RISK IN EMERGING MARKETS AND DEVELOPING NATIONS
"We urge policymakers in (advanced economies), especially those that issue reserve currencies, to give due attention to the risks and impact of spillovers on emerging market and developing countries and to undertake effective coordination and communication of their policies."
"We ask for due flexibility in the IMF's debt limits policy and the International Development Association's non-concessional borrowing policy for (low-income countries), taking into account the large financing needs of (low-income countries) and changing landscape of global financing. ... We urge the Fund to extend for two years the waiver on interest rates applicable to the Poverty Reduction and Growth Trust."
"We remain deeply disappointed that the IMF quota and governance reforms agreed to in 2010 have not yet come into effect, and urge the U.S. to complete ratification. This remains a significant impediment to the credibility and effectiveness of the IMF and unjustifiably delays forward-looking commitments."
"We're very committed to infrastructure. ... We understand the importance of infrastructure. The question is how much you devote to it. But we think Canadians who are paying on average I think it is 43 percent of their income on some form of tax ... are paying enough, too much actually. So we think there's real value to Canadians keeping more to spend and save. If they spend, it's adding to consumption, and if they save, it's adding to investment."
"There is a concern about a deflationary spiral. We're not predicting it, but we want to preclude it, and the (European Central) Bank has taken a number of steps. There's a limit to how much they can do, but they'll make their decision. It could be more."
"I think there needs to be a bit of flexibility for some countries that have the fiscal room to take steps which would enhance growth. But in all cases, I think it's very important - this is what we did - announce in a credible way that the objective is to get to a responsible budgetary situation or budgetary balance."
"We want to see Europe grow but the countries have to do it in a fiscally responsible way or they're going to get into trouble."
"Countries like Germany, running current account surpluses, can afford to invest more, not only because it would stimulate the economy of the European Union, but because they need to take care of their future economic growth."
"Currencies weren't discussed much at the Cairns G20 meeting. Since then, exchange rates have moved somewhat so there may be some discussions on that (at the G20 and IMFC) meetings this time. But it won't be a major topic of talks."
"I won't comment on exchange-rate levels or the speed of their moves. I will only say it's desirable for exchange rates to move in a way that reflects economic fundamentals."
"As a whole, global growth is likely to accelerate toward next year. There's no change to our view that the recovery in advanced economies, notably the U.S. economy, will spread to other parts of the world."
"The IMF's downgrade of Japan's growth forecasts reflects the fact the second-quarter downturn was bigger than expected. But both for households and companies, a positive cycle between income and expenditure remains firmly in place. Japan's economic slump will be temporary and growth will rebound in the third quarter."
"This has become a global theme. There's increased awareness that infrastructure investment is becoming important not just for emerging nations but for advanced economies."
"What we think now is that the capital markets have it more or less right but we don't ourselves know when we're going to do it... On the basis of our forecasts of the data, we can guess what we will do if that turns out to be right. On the basis of that forecast it looks like markets more or less have it right - somewhere in the middle of the year."
Asked how long "considerable time" was in reference to the Fed's forward rate guidance, he said: "Somewhere between two months and a year."
"The exchange rates are changing to reflect what is going on... That is appropriate."
"We will not intervene to affect the exchange rate."
"We don't have a recession in Germany, we have a weakening of growth."
"As soon as France and Italy implement substantial structural reforms, the situation in Europe will change."
"We Europeans have to become stronger, we have to deliver more growth, I agree 100 percent, but it is not to be achieved by writing checks."
"What we need is proper Germanic discipline applied to growth strategy rather than just applied to more satisfactory accounting."
"We see scope for more fiscal support for countries that have finished consolidation."
"I don't believe that if you focus only on structural policies and don't attend to the problem of slack in the economy ... its very doubtful that structural polices alone can do the trick."
"You have to stop these epidemics at the source. Trying to block your borders or isolating those countries somehow is not going to work.
"If anybody ... would like to make a contribution, they should do it now, not wait two or three weeks, because the price tag goes up every day that we delay."
"At the World Bank Group our enemy is poverty ... There is such a need for more investment in infrastructure that any organization that's focused on investment in infrastructure to fight poverty is our friend."
"The latest snapshot of the global economy looks uneasily familiar: a brittle, uneven recovery, with slower-than-expected growth and increasing downside risks."
"A much higher premium needs to be put across the membership on policies aimed at decisively raising today's actual and tomorrow's potential growth."
"For once, just for once, it's absolutely fine if those countries increase their fiscal deficit. This is not like the (normal) IMF ... It's just an indication that we are capable of mobilizing resources ... There are circumstances where we are capable of revisiting traditional standards."
"I would hope I would see a resolve to conduct both reforms on the one hand and investment on the other hand. I think it goes hand in hand, give and take and both surplus and deficit countries have to rally around better growth."
"Measures have been taken by the ECB to try to resist and reverse that risk (of inflation). More, we hope, will be done."
"We are saying there is a serious risk that that happens if nothing is done... but we're saying also if the right policies are decided, if both surplus and deficit countries do what they have to do, it is avoidable."
"We are very pleased that Greece has significantly improved its position, from a fiscal point of view, on the financial markets... but we also believe that going forward, and in order to deliver a continuous satisfactory outcome, the country would be in our view in a better position if it had precautionary support. So we're talking about evolution in the relationship (with the IMF), but we believe the relationship can still be extremely helpful for the country to move on."
"The 2010 quota and governance reform is an absolute must, it has to be implemented, and everybody knows that it is currently stuck before the U.S. Congress. We very much hope that the different branches of the U.S. authorities ... will understand the relevance of having an IMF that is representative of the global economy and includes the people that should sit at the table."
"We are still, I feel like, a bit of a bargaining toy between various, you know, people who actually believe that the IMF is okay. But it's a different story, it's above my floor."
"I will do belly dancing if that's what it takes to get the U.S. to ratify." (Compiled by Reuters' IMF/G20 team)