TOKYO Oct 11 The following are comments on
Thursday from finance officials in Tokyo for the semiannual
meetings of the International Monetary Fund and World Bank.
WORLD BANK HEAD JIM YONG KIM ON GROWTH SLOWDOWN IN CHINA
"In talking with the Chinese authorities, I am completely
convinced that they understand exactly the nature of the problem
and they're taking every measure - they're going through a
political change right now and once the political change is
complete, my sense is that they'll be very aggressive in trying
to restore growth."
KIM ON TENSIONS BETWEEN CHINA, JAPAN, SOUTH KOREA
"There are more things that bind together these three
countries than keep them apart."
"I'm very optimistic that in the next few months, with the
unfolding of various political and other events, I'm very
optimistic that the leaders of these three countries will come
back to their fundamental understanding of the importance of
cooperation in the region."
U.S. TREASURY SECRETARY TIMOTHY GEITHNER ON FISCAL CLIFF
"I don't think the strategy of deferring and delaying is a
responsible strategy. It might feel like an easy path at the
moment but it will still leave a set of big questions hanging
over the country. I don't think that will help."
"Our belief is that we can use the period between the
election (on Nov. 6) and the end of the year to negotiate a
framework of reforms that can be phased in over time. The
magnitude of policy reforms we have to agree on to achieve
sustainability are somewhere between 2 to 3 percent of GDP.
They're a very modest set of changes and if you do it in a
balanced way with a mix of tax reforms ad spending cuts you can
do a very good job of gradual reforms and still create some room
GEITHNER ON EUROPE
"Even though they have a lot of details to work out, the
agreement on that basic framework makes it much easier for
Europe to navigate what is going to be a long difficult period
GERMAN FINANCE MINISTER WOLFGANG SCHAEUBLE
"There is no country in Europe which would give any thought
to the question of abolishing the euro."
"I am convinced that we will be able to tell our friends and
partners around the world that Europe is in the process of
solving its problems and Europe is aware of its responsibility."
"We are convinced that in Germany and Europe it is of
central importance ...that the public believes that there are
reasons to trust the long-term foundations of our policies."
"Therefore, we believe that we will fulfill our
international obligations with our policy of growth-friendly
SCHAEUBLE ON CONSOLIDATION'S NEGATIVE IMPACT ON GROWTH
"One should also consider the advantages of the common
currency. No one was forced to become a member of the European
"Greece has repeatedly made clear that it does whatever it
can to stay in the monetary union. And when Greece wants that
and implements measures, no one will force Greece out of the
SCHAEUBLE ON IMF SUGGESTION GERMANY STIMULATE DOMESTIC
"Such suggestions reveal not so great knowledge about
Germany's situation. Domestic demand does rise in Germany."
"We are the growth engine of Europe and we believe it is not
helpful when one creates an impression that there are solutions
that would be easier."
"I don't believe in criticising others. That's cheap. It
would be much more reasonable when others would solve their
problems and Europeans theirs."
"The IMF has said time and again that high public debt poses
a problem. So when there is a certain medium-term goal, it
doesn't build confidence when one starts by going in a different
"When you want to climb a big mountain and you start
climbing down, then the mountain will get even higher."
JAPAN FINANCE MINISTER KORIKI JOJIMA ON FISCAL STIMULUS
"The government will do the utmost to ensure financial
market stability in the near term and we need to take fiscal
measures to stimulate the economy as needed. In the medium to
long term, we need to tackle fiscal discipline and economic
growth as a pair of wheels. As Europe's debt crisis clearly
shows, once fiscal policy loses market confidence, it would
cause a vicious cycle of a spike in government bond yields and
worsening of public finances."
"Rebuilding public finances is a common task for developed
countries ... Japan has enacted a law to increase the sales tax
to 10 percent as part of effort to achieve prime budget balance
by fiscal 2020/21 ... and this shows our stance of sincerely
adhering to our promise to international society."
JOJIMA ON CURRENCIES:
"Despite the fragile economic fundamentals, a strong yen is
continuing. I told (IMF Managing Director Christine Lagarde)
about our concern that further yen gains would pose major
downside risks to the Japanese economy, which is recovering from
(last year's) earthquake. Managing Director Lagarde told me that
the yen is somewhat overvalued."
JOJIMA ON EUROPE AND CHINA (after the G7 meeting):
"I said it is important for Europe to fulfill its
responsibility to steadily carry out agreed steps and that I
expect that will ensure market stability."
"Chinese economy is slowing down but there's room for fiscal
and monetary policy steps to achieve its growth target of 7.5
percent. There occasionally arise difficult problems between
Japan and China as we are neighbours, but Japan-China economic
relationship is close and (there is) interdependence, and I
believe its smooth development is important for development of
Asia and the world economy."
JAPAN FINANCE MINISTRY OFFICIAL AFTER G7:
"The focus of discussions (at the G7) was Europe's problems
but there was an exchange of views on a wide range of issues.
There was some mention (about the U.S. fiscal cliff) ...
"The euro-zone finance ministers and central bank governors
explained the reforms and measures now under way, and U.S. and
Japanese counterparts expressed their views ... It's not the
case that the meeting was dominated by a sense of pessimism
about Europe, or that there was a sense the region was not doing
IMF CHIEF CHRISTINE LAGARDE CALLS FOR POLICY ACTION
"We expect action and we expect courageous and cooperative
action on the part of our members."
"Whether you turn to Europe to the United States of America
to other places as well, there is a level of uncertainty that is
hampering decision makers from investing from creating jobs ...
We need action to lift the veil of uncertainty."
LAGARDE ON EUROPE DEBT CRISIS AND U.S. 'FISCAL CLIFF'
"There are threats on the horizon, threats that can be
addressed, should be addressed but are not necessarily
addressed. Here I'm talking about ... the policy decisions that
should be taken within the euro zone, in particular, and policy
decisions that should be made in the United States of America to
address the issue of 'fiscal cliff' and debt ceiling."
LAGARDE ON TOP CHINESE OFFICIALS NOT ATTENDING MEETINGS
"All economic partners in this region are very critical for
the global economy. Certainly at the IMF, where we encourage
cooperation ... we hope that differences no matter how
longstanding can be resolved harmoniously and expeditiously and
can be beneficial not only to those countries ... but also to
the global economy."
LAGARDE ON TALKS WITH EGYPT TOWARD IMF PROGRAM
"As you know, one of your (Egypt) authorities indicated he
was hoping for closure in the middle of next month. Fingers
crossed ... I am very confident we can discuss productively,
reach agreement, and help Egypt as much as we can."
LAGARDE ON EFFORTS BY EURO ZONE TO DEAL WITH DEBT CRISIS
"As is often the case with the euro zone, there is good news
and bad news. Good news is the fact that this European Stability
Mechanism that had been discussed and in the making for the last
months has now been christened ... That is the good news. In
terms of speed, the bad news is that for it to actually operate
there will be a legislative and often parliamentary process for
the fund to effectively work."
LAGARDE ON IMF'S ROLE IN EUROPE
"We are flexible but when we monitor we want to know that
what we monitor is something that we are comfortable with, that
makes sense from an economic point of view, which means that we
also want to participate in the design."
BANK OF JAPAN GOVERNOR MASAAKI SHIRAKAWA
"The outlook for the global economy is very difficult, so I
hope to discuss the risks to the outlook at the IMF meeting."
"It is unfortunate that People's Bank of China Governor Zhou
did not attend (this week's meetings). But my understanding is
that the deputy governor is leading China's delegation here.
Japan and China have close economic ties and I hope to continue
communicating with the PBOC."
"When explaining Japan's economic outlook, currencies are a
big part of that, so from that standpoint I want to explain our
monetary policy at the G7."
ECB GOVERNING COUNCIL MEMBER EWALD NOWOTNY
"The ECB assumes that we'll have a lower inflation rate next
year, below 2 percent.
"The ECB does not commit itself to future policy but my
personal view is that at the moment I don't see any need to
change the interest rate policy."
"Realistically, I hope that there will be a legislative
basis for the European banking supervision but in terms of
operations I don't think it will be in place before mid-2013."
FINANCIAL STABILITY BOARD CHAIRMAN MARK CARNEY
"There are signs that reforms ... in euro zone countries are
starting to improve their competitiveness and their current
account. It is important that the current momentum is not
"The core of the global banking system has substantially
improved their (global systemically important financial
institutions') capitalisation and I would say liquidity. But
there are regions of the global economy where that is not the
"(FSB) members expressed concern about unresolved issues in
the cross-border application of regulation (of derivatives).
They called on jurisdictions to put in place their legislation
and regulation promptly and to act by end of 2012 to identify
and address conflicts, inconsistencies and gaps in their
BRAZIL FINANCE MINISTER GUIDO MANTEGA
"When it comes to European countries, our view is that
they're taking the correct measures, that the instruments being
built are adequate, namely the common banking supervision and a
fiscal union, or the European Stability Mechanism."
"But the problem is that these instruments are still not
being used and implemented. Implementation keeps being delayed."