Voice Of IMF Annual Meeting: Difficulties In Solving European Debt Crisis

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At the end of September, at IMF headquarters in Washington, international currency

If New York became a world diplomatic center because of United Nations Headquarters, Washington became a global financial center because of its IMF headquarters.

This is a pale yellow building in Washington, D.C., which is only three blocks away from the White House.

Since World War II, the pattern of world economy and finance has been affecting.

Since the Iceland government, which was plunged into the international financial crisis in October 2008, applied for loans to the International Monetary Fund, IMF has attracted worldwide attention because of its role in coordinating the world's major platforms for coping with crises. The world's major media gathered here this year, but it feels like a crisis atmosphere similar to the 2008 annual meeting.

Lagarde, President of the International Monetary Fund, said that for low-income countries, especially developing countries, they do face significant risks.

If the economy of the developed economies is seriously down, the crisis faced by the developed economies is the most urgent task we need to solve now, because this is not only related to the developed countries, but also to other countries in the world.

World Bank President Zoelick told reporters that our main concern now is whether the confidence of developed economies will spread to emerging market countries.

During this IMF annual meeting, IMF released the global economic outlook report, which IMF sharply lowered global economic growth expectations.

The global economic growth forecast will be lowered by 0.3% and 0.5% respectively in the next two years, down to 4% level.

It is noteworthy that the United States has become a bigger economy in the report.

The report predicts that the US economy will grow by only 1.5% this year, far below the 2.5% expected in June.

Next year's economic growth is expected to fall from 2.7% to 1.8%.

At the same time, IMF expects the 17 economies of the euro area to grow by 1.6% this year, down from 2% forecast in June.

This year's growth rate in the developed economies is down to 1.6% from the previous estimate of 2.2%, and the growth rate will be reduced to 1.9% from 2.6% in the next year (Chart).

People can not help asking whether the world economy will go to the bottom for the two time.

Singapore's deputy prime minister and Minister of Finance and Human Resources Minister Shandaman told reporters that today's world economic situation is even worse than 6 months ago. The growth rate of developed economies in the United States and Europe is less than 1%.

In the current situation, we are vulnerable to every crisis, including debt crisis, banking crisis and price shock.

Oliver Blanchard, chief economist of the International Monetary Fund, told reporters, "no, because the" two bottom "means that our expectations should be negative growth.

Our forecast for the world economic outlook is 4% growth, which is quite good.

Look at the economic growth rate of emerging countries is very important, we predict that it will reach 6%, and we have given 1.5%-2% to some developed economies' forecast of economic growth, so all these positive data do not mean that there will be economic recession.

Namat Chafik, vice president of the International Monetary Fund, told reporters that we can say that the world economy is in a critical period of crisis. We need to take prompt measures to avoid the "two bottom" of the world economy.

This is also the key issue center of this annual meeting. We have actively discussed and exchanged with other leaders, and realized that we can take a series of policy adjustment and pformation to avoid "two bottom finding".

At the opening ceremony of the conference, Lagarde, President of the International Monetary Fund, quoted a famous French writer, Hugo, as saying: "a great disaster contains such charm, which will create a brotherly friendship among strangers."

Lagarde used this to describe the serious situation and the urgency and importance of all sides in solving the crisis.

Lagarde, President of the International Monetary Fund, said that we have seen the communiqu at the beginning, that is, "we are determined to take the common action to deal with the challenges of today".

We have launched a dialogue on this point and the responsibilities of each member state are very clear.

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Two, solving the European debt crisis is difficult.

Lagarde, President of IMF, said, "I have clearly conveyed this signal, that is, resolving the crisis does not rely solely on the strength of the European Union, but I have great confidence in the IMF187 member states. I believe that through the efforts of all the Member States, we have a common goal to jointly study the problems we face, and pay close attention to the measures to be taken. Our goal is clear, and I am confident and determined to carry it out.

At the opening ceremony of this annual meeting, Lagarde, President of IMF, who just took office soon, repeatedly stressed a word Implemen when he talked about the European debt crisis.

However, how can the international parties play an important role in such cooperation as IMF?

Judging from the current evolution of the European debt crisis, it is self-evident that it poses a huge threat to the world economy, and the outbreak of the European sovereign debt crisis coincides with the slowing down of global economic growth, soaring oil prices and inflation in emerging economies. All these problems are intertwined, making it difficult to solve the European debt crisis.

Martin Krustig, an The Associated Press economic columnist, told reporters that the problems have all appeared at the same time, like the slow development of the global economy.

Japan has suffered a rare earthquake this year, and floods in other parts of the world. Consumer spending in the United States has dropped sharply.

With the unemployment rate rising, all the problems are converging. But today, the most puzzling policymakers in Europe still remain the sovereign debt problem of Europe.

Otez, former governor of the Central Bank of Mexico, told reporters that we can see that a series of consequences arising from this crisis in Europe must be solved quickly because the crisis in Europe will spread to other parts of the world, so the settlement measures should be swift and should be included in the priority target.

In fact, the challenge is far more than that. Aside from the interests of the 17 member states of Europe and the coordination difficulty of IMF in solving the European debt crisis, IMF itself is also faced with various difficulties.

On the one hand, due to the departure of the former president Kahn due to sex scandals, IMF's internal confidence has been battered and its morale has been depressed. It will take some time to recover. On the other hand, it is no doubt that the total amount of $about 380000000000 of IMF's current fund to solve the European debt crisis is a drop in the bucket.

If the euro zone debt crisis spreads to Italy and Spain, IMF will need to inject at least US $350 billion of new capital.

Although this proposal was supported by some developing countries and France, it was opposed by the United States, Japan, Canada and Australia.

Whether the G20 summit in Cannes will be approved in November is still unknown. As the French banking system has bought a large amount of debt from Greece and Italy, as the new president of the European IMF and the French finance minister Lagarde, this identity has put him in a dilemma.

The aim of saving Europe has also been questioned in the international community.

Xiang Songzuo, director of the Institute of International Monetary Studies at Renmin University of China, told reporters that many people now suspect that the fund's participation in the rescue of the European debt crisis is mainly due to the rescue of your French banks, because if these banks fail, the French economic association will be hit hard.

Although the Slovakia parliament's proposal to expand the European financial stability mechanism has cleared the last obstacle for the expansion of the rescue fund to 440 billion euros.

But whether European countries can take bold measures and act swiftly as people expect, especially whether the European Union can timely coordinate internal differences and reverse the further spread of the European debt crisis will not only be the focus of attention of the global economic community, but also the key to the world economy's ability to avoid the two recession.

But in the eyes of many economists, it is almost impossible to solve the European debt crisis in a short time.

The director of the Institute of International Monetary Studies, Renmin University of China, said to Mr Song Zuo, "we must recognize that the European debt crisis is a simultaneous occurrence of several crises, that is, it now has a debt crisis, and what is called debt crisis", that is, you pay back the bill without paying interest and have no money to repay.

Second banking crisis. Now Europe has seen a banking crisis.

It is certain that his banking crisis will continue to spread.

The third one can be said that Europe actually has a political crisis or a social crisis, what is a political crisis or a social crisis.

So you see that the government announced that any measures would come out soon, and Greece would go on strike soon. Greece had to go on a large scale in the coming days. The whole country was going to strike. Italy was also on strike, and there were strikes in France.

In the view of the International Monetary Fund, the current European debt crisis still lacks a systematic and comprehensive solution to the crisis, and this comprehensive solution should cover at least four aspects: rectifying the financial situation of the crisis countries, strengthening the strength and risk resisting ability of European banks, formulating specific and clear strategies for European Economic growth, and finally reaching an effective agreement to enable Europe to carry out more effective crisis management in the future.

Shandaman, Deputy Prime Minister and Minister of Finance and Human Resources Minister of Singapore, said that IMF will not only provide financing conditions to all countries, but will also provide effective policy recommendations.

Our policy is not only to solve this crisis, but also to promote future economic development.

The fiscal consolidation of countries is a key link, and we will try to help countries reduce their debt to GDP ratio.

Anders Berg, the Swedish finance minister, said that we have seen the banking industry in many European countries have built up a "firewall". IMF has also made a commitment to rescue the economies of all countries, and all sides have expressed the need to effectively respond to the crisis. IMF will also provide effective support.

Three, calling for reform of the international monetary system and financial system.

Mark Lewis, the representative of the International Monetary Fund IMF in Turkey, recently delivered a speech at a university in Bursa, Western Turkey, and even attacked the student's throwing eggs.

Just now, when the IMF IMF representative in Turkey delivered a speech at a university in Western Turkey, Lewis

The students threw two eggs to him and shouted slogans against IMF.

Lewis quickly hid behind the stage to escape the attack, and then the student was taken out of the scene by security personnel.

In October 1, 2009, Kahn, a former president of the International Monetary Fund, was protesting at a university in Istanbul. He had been throwing shoes at local university students. Students in Turkey had been deeply confronting the International Monetary Fund and the world bank. This is because the IMF and the world bank put forward some guiding suggestions in the economic crisis of Turkey in 2001. For example, they advocated that the government of Turkey should give up intervention and tighten fiscal policy. These suggestions led to the failure of Turkey to use fiscal policy, causing the economy to fall into a serious recession, resulting in a large number of unemployment, thus deepening the economic recession and paying a heavy price for Turkey.

Xiang Songzuo, director of the Institute of International Monetary Studies at Renmin University of China, told reporters that we can recall that in the Asian financial crisis, the Latin American debt crisis in 1982, the debt crisis in Russia in 1999 and 1998, and then the Latin American debt crisis, the IMF was very strong and very strong. Almost everything he mentioned did not need to be divided.

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Zhang Zhixiang, former executive director of the Chinese International Monetary Fund, said that from 1996 to 1999, just in time to catch up with the Asian economic crisis or the Asian financial crisis, what we often talked about at that time was that the prescription was very different from the financial crisis that we are dealing with in 2008.

In the Asian financial crisis and the Latin American financial crisis in the 90s of last century, although IMF helped some countries, the conditions were rather harsh. The recipient countries must implement strict fiscal policies and carry out more liberalized market management.

This has led many countries to cut spending on health care and education, exacerbate the pain of people's livelihood, and bring long-term sequelae.

As the International Monetary Fund (IMF) has been controversial about the double standards applied to developed countries and developing countries, and has been slow in several crises, the international community has raised many doubts about the credibility of the International Monetary Fund.

Zhang Zhixiang, former executive director of the Chinese International Monetary Fund, went on to say, "I remember how South Korea was, and that was simply not to support the IMF.

The financial crisis and the European debt crisis have occurred one after another. The crisis has been affecting the global economy. However, what lessons we can learn from the crisis, how to reform the global international monetary system and financial system to avoid the recurrence of the crisis, and what role the emerging economies should play in this process has become a problem for all participants to think deeply.

Although Lagarde is the first female president since the IMF was founded in 1944, it has not broken the tradition of IMF dominated by Europe and the United States in charge of the world bank.

Over the years, IMF has been seen as a tool for rich countries. Today, in the world's major countries calling for major reforms in the international financial system, the future role and development direction of the International Monetary Fund has received widespread attention.

In July 12th, IMF announced this major change, including the proposal that Zhu Min, a special adviser to incumbent IMF, be appointed as the new vice president position. The new personnel structure shows that IMF has not yet stepped out of the power structure of the old financial system.

The change of Zhu Min's identity indicates that the world governance pattern is being injected into new thinking.

Namat Chafik, vice president of the International Monetary Fund, told reporters that we have made corresponding reforms and adjustments in this regard. For example, we listed 6% quota in emerging economies, which is a major adjustment.

Because emerging economies have made significant contributions to the world economy, they should also enjoy the right to speak with them.

In the global rebalancing process, emerging economies should also assume their corresponding role in the global economic recovery.

Shandaman, Deputy Prime Minister and Minister of Finance and Minister of manpower, told reporters that first we will seriously study the standards of the special drawing rights (SDR), including which currencies will be added to the SDR, which need clear and pparent standards.

However, SDR is not the primary issue. The primary issue we must consider is to diversify the use of money, and the currencies of emerging countries will also emerge in the field of trade and investment.

Although on the surface, emerging market countries have shown a certain degree of imposition in the International Monetary Fund and have also carried out the reform and adjustment of quotas, the United States still has 17% of the voting power and still has the ability to exercise veto power on major matters that require 85% of absolute majority voting.

Zhang Zhixiang, the former executive director of the International Monetary Fund of China, said that the great changes in the international monetary fund system are indeed the developed countries. They are still playing their role in developed countries.

But with the change of the entire global economy, the role of emerging economies, emerging economies and developing countries is growing. So the role of this piece in the global economy can not be ignored.

Xiang Songzuo, director of the Institute of International Monetary Studies of Renmin University of China, told reporters that our chairman Hu Jintao has said many times that we should establish a fair, just, inclusive and orderly international monetary organization. What does that mean? These eight words are not arbitrary.

The first step in radical reform is his policy philosophy and his philosophy.

In a changing world, your idea is not appropriate. You have to reflect on it.

For emerging market countries, the reform of the IMF has not only restricted the us to abandon the one vote veto and the amendment of the formula of fund shares.

Zhang Zhixiang, the former executive director of the Chinese Monetary Fund, said that for the International Monetary Fund, the biggest challenge of the international monetary system, if you can't cater to the trend of history, if you can't solve the problem, sooner or later, people will abandon you.

The International Monetary Fund also recognizes that its double standards for developed and developing countries are unfair.

If we continue this mistake, we will not only be unable to cope with the international crisis, but will also plunge IMF into a new crisis.

More importantly, in the past 10 years, great changes have taken place in the international economic and financial structure.

The importance of emerging economies has become increasingly prominent.

IMF can no longer ignore their existence.

At present, in the large-scale financing of IMF, besides the United States, the European Union and Japan are important foreign loans, China, India, Brazil and Russia are another important source of finance.

As a completely western controlled institution, it must straighten out its relationship with emerging economies and developing countries. We also heard such a voice at the IMF2011 conference.

Lagarde, President of IMF, told reporters that as an important emerging economy, it is the responsibility to participate in reshaping the global economy, especially for countries with external surpluses, which should play a proper role in reshaping the balance, especially in the current economic crisis.

So the message I want to convey is very clear. Countries with external surpluses need to contribute to rebalancing.