April 17, 2015 / 2:18 PM / in 3 years

HIGHLIGHTS-IMF, World Bank 2015 spring meetings in Washington on Friday

WASHINGTON, April 17 (Reuters) - The following are highlights of the International Monetary Fund and World Bank meetings on Friday in Washington, where finance ministers, central bankers and other top officials are gathering.

G20 COMMUNIQUE ON GLOBAL ECONOMY

”We welcome the strengthening of economic activity in some key economies, yet global growth remains moderate and is following divergent paths. Near-term prospects in advanced economies, notably the euro zone and Japan, have improved recently, while the U.S. and UK continue to record solid growth, which could support a stronger global recovery. Growth in some emerging market economies, such as in China and India, is strong, but remains uneven. Low-income developing countries continue to demonstrate strong performance.

“Risks to the global outlook are more balanced since we last met. The overall global impact of lower oil prices is estimated to be positive, with varying effects. Nonetheless, there are important challenges including volatility in exchange rates and prolonged low inflation, sustained internal and external imbalances, high public debt, and geopolitical tensions.”

TURKISH DEPUTY PRIME MINISTER ALI BABACAN ON G20 VIEW OF GLOBAL MONETARY POLICIES

“Monetary policy settings should be carefully calibrated and carefully communicated to minimize spillovers.”

ON G20 VIEW OF GLOBAL ECONOMY

“On the global economy we noted that global recovery continues although it is at a moderate and uneven pace.”

ON U.S. FEDERAL RESERVE COMMUNICATION

“I think there is a broad consensus that the Federal Reserve is doing a much better job of communicating what future policies could be.”

“Clear communication is very important not just only for the U.S. economy, but globally because of the possible spillover, spillback effects.”

ON GREEK CRISIS AND G20 TALKS

“The European Union, ECB and also IMF, which are the official counterparts of the (Greece) discussion, and unless there’s a demand from those parties to bring this to the agenda of the G20, it would not be very appropriate for it to be discussed in the official sense.”

U.S. TREASURY SECRETARY JACK LEW ON GREECE

“We urge the authorities to quickly and fully commit to technical negotiations with their international partners. Not reaching agreement would create immediate hardship for Greece, and uncertainties for Europe and the global economy more broadly.”

“I believe that the kind of detail that’s needed requires going literally through every line in your budget and every program that you control and coming forward with the kinds of options that both build confidence that there’s a sustainable path and that also start to show how you have the potential for economic growth in the future ... This isn’t resolved by speeches. It isn’t resolved by rhetoric. It’s resolved by the hard technical work.”

ON NEED TO BOOST DOMESTIC DEMAND

“Policy makers in advanced and emerging economies alike must redouble efforts to boost domestic demand so we can realize our economic potential. Surplus countries in particular are best positioned to do so.”

“We are concerned that the global economy is reverting to the pre-crisis pattern of heavy reliance on U.S. demand for growth ... economies projected to record rising current account surpluses, including Korea, Germany, China, and Japan, should move expeditiously to pursue domestic-demand boosting policies.”

ON EUROPE AND GERMANY

“Going forward, there is scope for policy responses that better calibrate the path of fiscal adjustment, including substantial increases in infrastructure spending, to support domestic demand. This is particularly true in Germany ...”

ON CHINESE YUAN

“While China’s exchange rate intervention has declined, a number of factors indicate that the RMB exchange rate remains significantly undervalued. China should build on the recent reduction in intervention and durably curb its activities in the foreign exchange market, including at times when there is market pressure for appreciation.”

ON JAPAN

“Policymakers need to deploy all three policy levers - fiscal, monetary, and structural - to secure a balanced and durable recovery and to boost domestic demand.”

RUSSIAN FINANCE MINISTER ANTON SILUANOV ON GLOBAL ECONOMY

“A year ago we took a decision (at the G20) to boost growth 2 percent above trend over five years. Not only has that not happened, but ... there is no optimism about global growth. ... Everyone is talking about a kind of uncertainty.”

ON FEDERAL RESERVE MONETARY POLICY

“(The Fed‘s) Yellen said that if the Fed raises rates, they will do that very carefully ... She said that the Fed’s actions have to be predictable, transparent and understandable for markets. ... They want to show that they’re going to do things in a transparent way.”

“We’ve (Russia) already experienced so much, that a rise by one percentage point by the Fed ... for us, after everything we’ve gone through, that doesn’t comprise a major risk.”

ON RUSSIA‘S RATINGS

“Today we met with all the rating agencies. I met personally with one of them, with Fitch. They’re not changing their rating for now. ... They’re going to study more deeply the situation in the (Russian) economy, in finances. ... Of course in the end it’s the decision of each agency.”

ON IMF QUOTAS

“We (G20) put out two options: de-linking and ad hoc. ... We’re in favor of the more strict option, de-linking. Because we see difficulties in getting (the quota reforms) through Congress for the third year, so we don’t see any basis for optimism.”

CHINA‘S VICE FINANCE MINISTER ZHU GUANGYAO ON AIIB

“Now all new members is fixed. Later this month will have more opportunity to gather together to discuss funding. That’s very important ... everything should be decided by real negotiations and the rule of law of the AIIB is the mandate of the bank. That’s through not only China, that’s through negotiations. And of course, China, from U.S., from others, they want high standards. We agree with high standards and opinions will be gathered through negotiations and reflected in the formal legal document ... We hope that in two or three months we can really conclude negotiations.”

ON AIIB AND FINANCIAL SYSTEM

“The intention for that is economic development rather than any other intention. The relationship with the World Bank, ADB is a complementary role, rather than replace. So more generally to say, China’s role in the current international financial system is constructive and we play the contributor function and we want to improve, we want to enhance the capacity of that, rather than any intention to overthrow the current system.”

ON IMF REFORM

“We strongly urge the U.S. Congress to quickly approve the 2010 IMF quota reform agenda. It’s five years - too long time, too much delay. That’s damaged the reputation of the IMF, damaged the reputation of the G20 and also damaged the image of the United States. I hope that the U.S. Congress can accept the proposal recently made ... more quick to conclude their internal debate.”

ON GLOBAL ECONOMY

“Now we are seeing some improvement in the global economy, but unfortunately the recovery is too slow, uneven situation too much; that’s why we must strengthen our policy coordination ... we certainly face some challenges ahead.”

JAPAN FINANCE MINISTER TARO ASO ON AIIB AND IMF REFORMS

“There was no particular discussion at the G20 on AIIB. China made some remarks, but I don’t think others made any.”

“Japan has long experience and expertise in development lending. The AIIB doesn’t ... If such a bank lends without appropriate checks, the recipient country may default on its debt. That will cause trouble for existing donor institutions and countries. This is something we must avoid.”

“There was heightened frustration among emerging economies on delays in IMF quota reform ... I heard more complaints about it than last year.”

BOJ GOVERNOR HARUHIKO KURODA ON LOW INFLATION RISKS

“There’s no change to the G20’s existing stance on monetary policy. Japan’s monetary policy wasn’t discussed at the G20. But our stance of pursuing quantitative and qualitative easing to raise inflation expectations and hit 2 percent inflation ... is in line with the principle laid out in the G20 communique.”

AUSTRIAN FINANCE MINISTER HANS JOERG SCHELLING ON GREECE

“The biggest problem we have with Greece right now is one of trust, in all respects. We have made decisions that Greece agrees to, and the next day, it all changes ... When that happens every time, it’s a bit problematic. So in addition to the financial problems, we also have a crisis of confidence.”

EUROPEAN CENTRAL BANK GOVERNOR EWALD NOWOTNY ON EMERGENCY LIQUIDITY FOR GREEK BANKS

“The most important question is that it’s for solvent banks, and that does not come to monetary financing.”

BANK OF MEXICO GOVERNOR AGUSTIN CARSTENS ON G20 TALKS AND IMF REFORMS

“We have instructed for the executive board to look into interim steps ... at the end there was no other discussion about any objective than the 2010 reform.”

CHILEAN CENTRAL BANK GOVERNOR RODRIGO VERGARA

“Risks remain tilted to the downside, and are dominated by adverse scenarios along the path of monetary normalization in the United States.”

BRITISH FINANCE MINISTER OSBORNE ON GLOOM AND GREECE

“The situation in Greece is the one that at the moment is the most worrying for the global economy, and the discussions about Greece have pervaded every meeting. The mood is notably more gloomy than at the last international gathering. And it’s clear now to me that a misstep or a miscalculation on either side could easily return European economies to the kind of perilous situation we saw three to four years ago. The crunch appears now to be coming in May, and it would be a mistake to think that the UK would be immune to a return to this instability in European financial systems and the European economy. And of course it would be therefore the very worst moment for there to be any confusion about the direction of British economic policy or for a change of direction from the plan that we have pursued.”

ON IMF ECONOMIC ASSESSMENT

”Obviously the background to these spring meetings, which the IMF laid out to the G20 last night, is an outlook for global growth which is weaker than since the annual meetings in October, with persistent risks to the international economy. Global growth for 2015-16 has been revised down.

“... And the IMF made clear that despite the shot in the arm the global economy has received from lower oil prices, growth prospects across the main economies are uneven, with weaker prospects for some large emerging market economies that raise concerns. And the legacies of the Great Recession and the euro area crisis are still visible in many countries, with high levels of debt weighing on spending and growth.”

ON THE IMF AND GREECE

“I‘m confident that as the highest-tier lender to Greece that the IMF can be better protected than some of the other potential creditors to Greece. And of course, the IMF deals with many situations around the world where there are countries that have problems with their repayments to international creditors. But you know, I think the IMF exists to help economies in trouble. I think most of the challenges lie not in the relationship between the IMF and Greece but in the relationship between the euro zone and Greece.”

IMF EUROPEAN DEPARTMENT DIRECTOR POUL THOMSEN ON GREECE

“It’s important that we in the coming days make significant progress, that the process gains momentum ... to conclude the review with the Fund we need a comprehensive package, we cannot conclude the review based on a few measures. There needs to be a comprehensive package and that will clearly take several weeks or more of discussions to put that in place.”

Thomsen said there would be a significant increase in Greece’s cumulative debt servicing and repayments between June and August. “Clearly it’s important that one reach agreement on a comprehensive program that could unlock disbursements before then.”

IMF EUROPEAN DEPARTMENT DEPUTY DIRECTOR MAHMOOD PRADHAN ON ECB POLICY

“The assessment of (ECB) QE so far, it’s just started, but all the impact of the effects you see so far are in the right direction, it’s not just the exchange rate, it’s large, significant changes in the term premia, low bond rates, and a substantial increase in equity prices, which it what you would expect.”

UKRAINIAN FINANCE MINISTER NATALIA YARESKO ON UKRAINE‘S IMF PROGRAM

“I have to emphasize that these (IMF) targets are written in stone. This might be painful for some, but this is eventually in everyone’s interests.”

“Ukraine is not facing only a liquidity problem, but also a solvency problem. Therefore a combination of coupon reduction, maturity extension and nominal reduction is required to meet all three of those (IMF) targets.”

IMF DEPUTY MANAGING DIRECTOR MITSUHIRO FURUSAWA ON AIIB

“It’s true that there are huge infrastructure needs so new, multilateral banks such as the Asian Infrastructure Investment Bank (AIIB) surely can be additional sources of infrastructure funding. We welcome these developments as they seek to coordinate with and compensate existing developments banks ... I think there is a large scope for cooperation.”

DEUTSCHE BUNDESBANK PRESIDENT JENS WEIDMANN ON GREEK FINANCING

“The idea that there could be financial aid without a program seems to me to be a bit absurd. But what I do think to be even more absurd is the idea that the central bank could take over the financing of a state ... The financing of a state through the central bank would be an obvious violation of the EU rules.”

“The bank supervision in Europe does think that the Greek banks fulfill at the moment the conditions for receiving emergency credits from the central bank ... This is the discussion that we are having at the moment.”

“On emergency credits of the Bank of Greece, you know my position. I think that emergency liquidity help which is given under extraordinary circumstances for a limited period must be connected with the firm commitment of the banks to do all they can to improve their liquidity situation.”

GERMAN FINANCE MINISTER WOLFGANG SCHAEUBLE ON AIIB

“We have spoken yesterday and also will do today about the AIIB. The work at the AIIB is making progress. We will lead the negotiations in a way that we will not get any additional problems in the G7.”

ON GREECE AND APRIL 24 EURO ZONE MINISTERIAL MEETING IN RIGA

“There are no news ... I am not sure that we will have anything new in Riga.” (Compiled by Reuters’ IMF/G20 team)

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