Transcript of a Press Conference by IMF Managing Director Christine Lagarde at the end of a G-20 Meeting of Finance Ministers and Central Bank Governor Meeting

IMF News, February 23, 2014

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Canonical URL: Transcript of a Press Conference by IMF Managing Director Christine Lagarde at the end of a G-20 Meeting of Finance Ministers and Central Bank Governor Meeting

Date and place: Sydney, February 23, 2014.
Occasion: Press conference at the end of a G-20 meeting of Finance Ministers and Central Bank Governors hosted by the Australian Presidency.
Acknowledgements: Prime Minister Abbott, Treasurer Joe Hockey, and Governor of the Central Bank Glenn Stevens singled out for hospitality and hosting.

The Australian Presidency placed growth as the rallying factor for both advanced economies and emerging market economies.
Meeting dynamics:
- Initial expectations of adversarial discussions between advanced economies and emerging markets — particularly over tapering by the U.S. Federal Reserve — did not materialize.
- Participants displayed "solid, consistent exchange of views" and "respect for each other's necessary policies."
- Growth served as a unifying objective.

IMF delivered an analysis at the request of the Australian Presidency on reforms required to achieve "more and better growth."
Reform channels identified: fiscal reforms, structural reforms, and monetary policy mindful of domestic effects and spillovers.
Projected impact of reforms:
- A 0.5 increase of GDP over a period of five years which totaled 2 percent additional GDP over that period of five years.
- Equivalent stated outcome: "this 2 percent GDP increase with this 2 trillion additional that could be delivered."
Implementation notes:
- Endorsement of the IMF paper and modelization was reported.
- G-20 members are to identify specific actions and deliver country-specific reforms.
- The IMF believes the 2 percent objective "can be achieved and possibly exceeded" if identified reforms are adhered to and delivered.

Reform implementation must be country specific.
Examples referenced: China, Japan, Mexico cited as indicating parts of their plans that respond to the four broad reform categories (including labor market reform, fiscal reform, etc.).

Status: Ukraine is a member of the IMF.
IMF stance:
- "If the Ukrainian authorities were to ask for IMF support... we stand ready to do that."
- Support types: policy advice, financial support, diagnostic assessment, and catalytic role in partnership with other international actors.
Preconditions and process for IMF engagement:
- Need for counterparties and dialogue: "we need to have somebody to talk to."
- Economic program must be owned by the authorities and the people.
- IMF must operate "under the rules" and require initial economic reforms to be started for international financial support to follow.
Operational capability concerns:
- The IMF can provide help when requested but needs reliable, long-term resources and a representative institution to face future risks and crises.
- Reference to quota reform: the 2010 reform needs to be delivered upon by the membership to ensure the IMF remains representative and resourced.

Concern raised about stalemate in IMF reforms (quota changes and funds available).
Managing Director's response:
- Commitment to continue striving for effectiveness regardless of obstacles.
- Emphasis on the need for reliable, long-term resources and delivery of the 2010 reform to maintain IMF representativeness and capacity.

Credit given to the Australian authorities, including Joe Hockey, for facilitating constructive dialogue.
Observed attitude: open-mindedness among participants to consider domestic requirements, spillover consequences, and the reality of volatility associated with monetary policy changes.
Final assessment: the debate "certainly was not the difficult debate that was portrayed in advance of the meeting."

Transcript of a Press Conference by IMF Managing Director Christine Lagarde, February 23, 2014.