WASHINGTON, April 19 (Reuters) - The following are highlights of comments by finance ministers and central bankers in Washington this week for a meeting of the Group of 20 and the semiannual meetings of the International Monetary Fund and World Bank.
“I see absolutely no reason why (Spain) should have a bailout.”
“Spain deserves better” he said of market sentiment and rise in yields. “It’s difficult to understand because Spain has never been in such good shape in terms of (budget) measures and neither has Italy, and yet they are targeting those two.”
“The US recovery is the one positive sign on the horizon today.”
GURRIA ON WHETHER CHINA AND BRAZIL WILL CONTRIBUTED TO THE IMF:
“I think so, they have got very large reserves...They have a stake because it (Europe) is the single largest trading bloc in the world”
“They will get a rate of return which is comparable to putting it in an eligible bank and also it will work in their favor in making these countries players.”
BRAZIL’S FINANCE MINISTER GUIDO MANTEGA ON NEW RESOURCES FOR IMF:
“We are not ready to set a figure because there are preconditions that have not been fulfilled by the countries - whether they will comply with the agenda of reforms.”
“Some countries are not very enthusiastic about the IMF reforms. They are much more enthusiastic about asking for money rather than moving forward with the quota reform.”
Asked about the possibility raised by the IMF of using EU’s rescue fund ESM to inject money directly into the European banks.
“We can discuss it. The treaty says that the ESM can intervene into banks if a country asks for it.
The ESM still has to come into force, it’s a bit early.
We will listen to them if they raise the issue at the meeting”.
“They have their estimates and we have ours. Nobody can be certain of its forecasts in this moment of uncertainty. There are ranges.”
“As far as there is the confirmation that we are doing the right things, this is what matters.”
“There are governance issues here relating to a couple of issues. One is that the IMF has been working with, as part of a troika in Europe including the ECB - that’s not the traditional way the IMF operates and I’ve raised this with the managing director. Traditionally, the IMF would direct what needed to be done and sit on opposite sides of the table.”
“The second issue is because of the large number of European seats on the board of the IMF, some of us - and Canada is certainly of the view that we ought have two keys in effect, that we would have one vote by euro zone countries and another vote for approval by the non euro zone countries when we’re dealing with this particular issue.”
“Given that the major challenge here is a sovereign debt challenge in euro zone countries and that euro zone countries are asking non euro zone countries to contribute to resources at the IMF, our view is that there ought to be two votes ... that is, an approval by the euro zone members and approval by the members that are not part of the euro zone like ourselves. Both would have to agree ... on what program is to be followed by the IMF in those countries (for it to pass).”
“Experience teaches us that these shocks can come, they come quite quickly, the timing cannot be anticipated in any logical way and the responses have to be dramatic and overwhelming. We are not seeing that kind of response yet, quite frankly, in Europe, although some progress has been made.”
ECB EXECUTIVE BOARD MEMBER JOERG ASMUSSEN ON MILD RECESSION:
“We think we have done our task in the last months by quite a number of standard and non standard measures we have taken... We would expect now only a very mild recession this year for the euro zone.”
“We need more action at the level of the member states, action of the European institutions. So by our actions we have bought time, but the mandate and the technical instruments are limited in a way that now other players have to do their part to kick start growth.”
“The decision on what needs to be done more is with the Spanish government. They have a clear majority and they can act, and I think they have acted in different ways...So the ball is clearly with the Spanish government here.”
“(The Europeans) have a combined firepower of around $1 trillion. So I think the Europeans have done their part and now it’s up to our global partners ... that we increase the IMF resources in order to get a global firewall from which all stakeholders in the global financial system can benefit. I think we can reach a significant IMF resources increase this weekend here.”
“Which are the tools we have to face the crisis? Counter-cyclical and sustainable fiscal policies and greater integration in South America, with the elimination of the dollar as our trading currency, and better use of our production chains.
“It’s not clear how long a solution for this crisis will take. There is a great risk that a slowing global economy will have negative impact in the region.
“We need to strengthen our domestic markets and better integrate our countries.”
BANK OF JAPAN GOVERNOR MASAAKI SHIRAKAWA ON MAJOR CENTRAL BANK’S MONETARY POLICY:
“At this critical juncture, we need aggressive monetary easing. That’s without question.”
“But we can’t continue this easy policy forever. At some point, we need to reverse monetary policy. What’s needed is to clearly explain what we’re trying to achieve.”
“The slowdown in global growth has not stopped, but we’re seeing some positive signs in the U.S. economy. Tail risks regarding Europe has subsided.”
“I’d like to express (at the G20 meeting) the need for Europe to make efforts toward economic and fiscal reform.”
“Europe’s problems are not something that can be solved immediately. But it means a lot that tail risks regarding Europe has subsided significantly from last year.”
“Contribution by BRICS nations are indispensable (for increasing IMF funding capacity). I expect them to offer funds together as a scheme at some stage.”
“At the G7 meeting. I hope to express Japan’s view on Europe’s firewall”
“As part of the outcome of this meeting we expect our firepower to be significantly increased.”
“We are going to ask the membership to finish the job in terms of quota resources and in terms of governance. There are changes that need to take place to better reflect the membership of the institution in terms of better economic strength, in terms of economic rule and we are not there. We still have 16 percent to go on the quota resources, and nearly half the job still undone on the governance reform. So we will be pushing that as well.
“We will not complete the job this time because our target and deadline is the next annual meeting, which will take place in Tokyo.”
LAGARDE ON U.S. LEGISLATION TO YANK IMF RESOURCES, DELAYS IN QUOTA REFORM:
“What we need to constantly demonstrate is the efficiency of the IMF, the fact that we don’t give grants, we give loans, we get paid back. It is money that is well managed. No country has ever lost money on the money IMF. I hope what is clear is that the leading economic power in the world clearly has to have a leadership role and I think it is in the tradition of the United States ... and that is one way to demonstrate it.”
“Low income countries have to make sure that they temper with what is inevitably going to happen and what has been signaled in terms of lower aid resources, lower remittances possibly, which is going to put them in a more fragile position when they’ve actually used a lot of their buffers and their fiscal reserves.
“The PRGT - Poverty Reduction and Growth Trust - which is our pooled resources from which we draw concessional loans for low-income countries (also) needs to be beefed up and we will be calling the membership to actually do that. The numbers are not that big and the needs are not as voluminous but it is equally important that we have the adequate resources to help the low income countries if they need it.”
“The euro zone is the epicenter of potential risk.”
She said Europe has taken “significant steps in recent months” and made a “significant improvement of the firewall. There is a little bit missing here or there but it shows significant determination to defend their currency zone.”
“We are seeing a light recovery blowing in the spring wind but also see dark clouds.” She called the world economy in a “timid and fragile situation with high risks.”
“This is a good move. It is a baby step. It is a move in the right direction. I hope it is not the last step.”
“The European Stability Mechanism and European Financial Stability Facility could actually help in terms of recapitalization anywhere in the euro zone. It has to be channeled through sovereigns. ... What we are advocating is that this be done without channeling through the sovereigns.
“It could be accompanied and should be accompanied by more global European supervision.”