WASHINGTON, April 12 (Reuters) - The following are highlights of the International Monetary Fund and World Bank meetings on Saturday in Washington, where finance ministers, central bankers and other top officials are gathering.
EUROPEAN CENTRAL BANK PRESIDENT MARIO DRAGHI
ON DEFLATION CONCERNS RAISED:
"It was not only the IMF, no, we heard concerns about this low inflation also from other advanced countries ... It has to be placed in perspective, but at the same time I said we shouldn't be complacent."
ON EURO ZONE ECONOMY:
"The recovery is proceeding, it's modest and the recent survey data seem to say that even the first quarter of this year will show positive growth."
"Low inflation is supporting the real disposable incomes of a part of the world where the percentage of retired people is high."
ON MONETARY POLICY AND EXCHANGE RATE:
"In a sense, if you want our monetary policy to remain as accommodative as it is today, a further strengthening of the exchange rate, I don't want to give you a level where we will act or not, I am giving you an orientation, would require further monetary policy stimulus."
ON GREECE'S RETURN TO BOND MARKETS
"I think the return of Greece to the bond market is a welcome episode and certainly it shows that markets appreciate the very significant progress that's been achieved by the Greek government and the Greek population."
IMF MANAGING DIRECTOR CHRISTINE LAGARDE
ASKED ABOUT THE IMF'S "PLAN B" IF THE U.S. CONGRESS DOESN'T APPROVE IMF REFORMS BY YEAR END:
"Plan A is going to be explored to the end, and in depth, but if that plan A doesn't work, then we will worry about plan B."
ON POSSIBILITY OF ECB EASING:
"We are encouraged to see that the ECB, and to have read, to have heard from the president of the ECB, that they appreciate that low inflation is an issue ... and we were very encouraged to hear that the ECB has available, and will use in due course and if necessary, the appropriate tools to deal with it."
GERMAN FINANCE MINISTER WOLFGANG SCHAEUBLE
ON IMF REFORMS:
"It was remarkable that at the IMF meeting as at the G20 the need for structural reforms played a prominent role."
ON MARKET REACTION TO GREECE'S RETURN TO CAPITAL MARKETS:
"I have said they exaggerate ... The same way they overshot some years ago on the negative side they are overshooting now to the positive side."
ALGERIAN CENTRAL BANK GOVERNOR MOHAMMED LAKSACI
ON EUROZONE DEFLATION RISK:
"The risk posed by a very low inflation, possibly leading to deflation similar to the experience of Japan in the 1990s, is a source of concern and should be appropriately addressed through more accommodative monetary policy."
GERMAN CENTRAL BANK PRESIDENT JENS WEIDMANN
ON IMF REFORMS:
"I am personally skeptical about the chances for the interim steps which are presently discussed."
THARMAN SHANMUGARATNAM, CHAIRMAN OF THE INTERNATIONAL MONETARY AND FINANCIAL COMMITTEE
ON INTERNATIONAL SAFETY NET:
"One of the areas ... in international finance that is missing is a space that provides quick assistance, quick liquidity in times of crises to well-managed countries without conditionality, because they are well-managed and pre-qualified for such purpose but which can reduce the need over time for developing economies to build up their own reserves at the cost of growth.
"That's the real objective. Ultimately it's about growth and an international safety net. A well-designed international safety net will avoid the need for each country to build up its own safety net. That's one of the issues that's coming out, coming up."
JAPANESE FINANCE MINISTER TARO ASO
ON FEDERAL RESERVE TAPERING:
"Recent progress in the U.S. Federal Reserve's tapering stem from the recovery of the U.S. economy and this trend should basically be welcomed. On the other hand, the effect of the Fed's tapering on emerging market economies and other economies should continue to be properly addressed."
ON EURO ZONE:
"In the euro area, there are stronger signs of economic recovery, but, as the IMF has pointed out, the risk of deflation should continue to be carefully monitored. Japan experienced a protracted period of deflation in recent years.
"Based on our experience, once a deflationary mindset takes hold, it is easy to fall into a vicious cycle, whereby people start to postpone consumption and investment, leading to further deflationary pressures. So, it is desirable to implement aggressive macroeconomic policies before the economy falls into deflation."
BRAZILIAN FINANCE MINISTER GUIDO MANTEGA
ON ECONOMIC CONDITIONS AND MONETARY POLICY IN THE EURO ZONE:
"The Fund is recommending more monetary easing to the ECB, and rightly so. Deflationary pressures are of special concern."
"In southern euro-area countries policy interest rates - in real terms - are substantially higher than growth, creating hardship for countries striving to ensure debt sustainability and gain competitiveness within a monetary union. High real interest rates amplify debt burdens, making it difficult to implement growth-enhancing measures."
ON U.S. INTEREST RATE NORMALIZATION:
"Real interest rates in the United States have begun to rise and will probably continue to increase. If this occurs gradually and as a consequence of economic recovery, it may not be a concern for emerging market economies and developing countries."
"The transition to a post-crisis world economy has only started and can still create zones of turbulence and instability, especially for emerging markets."
ON TENSION BETWEEN POLICIES IN ADVANCED ECONOMIES AND EMERGING MARKET ECONOMIES AND DEVELOPING COUNTRIES:
"The perception that AEs (advanced economies) are 'naval-gazing' and that EMDCs (emerging market and developing countries) are 'on-their-own' creates incentives to build up reserves, strive for competitive exchange rate, contain current account deficits and adopt capital flow measures. EMDCs will probably continue to follow these routes, according to individual country circumstances. But the question we should all ask is whether the simultaneous adoption of these policies by a large number of countries will lead to a favorable outcome for the world economy as a whole."
BANK OF ITALY GOVERNOR IGNAZIO VISCO
ON MONETARY EASING IN EUROPE:
"There may be various combinations and the ECB ... is putting this together. Then, there is the issue of timing - it depends. Obviously, we are considering, we are preparing a number of options, a number of possibilities, in both conventional and non-conventional policies. Why limit that to non-conventional? And (we are considering) if its needed - that is fundamental. But if it is needed then I believe the whole council is unanimously behind the decisions that would be taken."
ITALIAN ECONOMY MINISTER PIER CARLO PADOAN
"The issue was discussed in broad terms. There was of course a recognition of something which is well-known to everybody: the interdependencies between Ukraine, Russia and other economies is particularly relevant."
SWISS FINANCE MINISTER EVELINE WIDMER-SCHLUMPF
ON IMF CALL FOR EASY MONETARY POLICY TO COMBAT LOW INFLATION
"The recommendation for accommodative monetary policies in advanced countries is too broad. It should be more nuanced. The possible risks posed by too low inflation should be more thoroughly qualified by taking into account the precise structural, economic, financial and monetary conditions of the region or the country in which it occurs. By contrast, we would highly welcome a clearer acknowledgement of potential risks to financial stability arising from prolonged monetary easing."
IMF STEERING COMMITTEE COMMUNIQUE
ON GLOBAL ECONOMY:
"Global activity continues to strengthen. However, the recovery is still fragile and downside risks remain. Creating a more dynamic, sustainable, balanced, and job-rich global economy remains our paramount collective goal."
ON MONETARY NORMALIZATION AND SPILLOVERS:
"Monetary policy settings in major countries should continue to be carefully calibrated and clearly communicated, with cooperation among policymakers to help manage spillovers and spillbacks. Monetary policy in advanced economies should provide the necessary accommodation, with the eventual normalization being conditional on the outlook for price stability and economic growth."
SPANISH ECONOMY MINISTER LUIS DE GUINDOS
"Our view in Spain is that there really is no risk of deflation, not in Europe or in Spain."
CHINESE VICE FINANCE MINISTER ZHU GUANGYAO
"This is a geopolitical issue too. We hope that event of geopolitical risk won't cause a big shock for the global economy, particularly for ... Europe's economy."
"That's why we support any action necessary to calm down the tension and to stabilize the economy, including Ukraine's economy."
ON IMF REFORMS:
"During the period before the end of the year, we are certainly continuing very full cooperation with the IMF and we hope this difficult time - particularly Ukraine - the IMF plays quick and strong action ... We support that."
BRITISH FINANCE MINISTER GEORGE OSBORNE
ON THE GLOBAL ECONOMIC OUTLOOK:
"Significant downside risks remain and some new risks have emerged, including an increase in geopolitical tensions, notably with the situation in Ukraine. In order to safe-guard the global recovery, policymakers must continue to build their economies' resilience by implementing much needed reforms, tackling underlying vulnerabilities and ongoing efforts to reduce public debt."
ON GLOBAL MONETARY POLICY WORLDWIDE:
"As part of the global recovery, policymakers should communicate their expectation of higher financial market volatility, which is currently below historical norms. This should help ensure a common understanding and a reflection in market prices."
ON EMERGING MARKETS:
"The immediate priority for EMs is to address policy and institutional weaknesses where they exist and strengthen macroeconomic fundamentals. Strong macroeconomic policy frameworks and structural reforms can support sustainable growth and build resilience to economic shocks." (Compiled by Reuters' G20/IMF team)