World finance leaders have gathered in the US capital Washington DC – just down the road from President Donald Trump’s White House – as they consider how to respond to his protectionist plans.
The International Monetary Fund and World Bank spring meetings will try to gauge how big a threat Trump is to open trade and global integration, even as the world’s economic outlook brightens.
World Bank President Jim Yong Kim told reporters: “We’re encouraged to see stronger economic prospects after years of disappointing global growth. There are still many downside risks, however, and countries that have the fiscal space need to continue with structural reforms.”
He also said he was “encouraged” by the Trump administration’s interest so far in the multilateral lender’s mission and its plans to harness more private capital for development finance.
JimYongKim</a>: We want to bring more private financing to <a href="https://twitter.com/hashtag/globaldev?src=hash">#globaldev</a> to free up resources so countries can invest much more in their people. <a href="https://t.co/imxba65fJE">pic.twitter.com/imxba65fJE</a></p>— World Bank (WorldBank) April 20, 2017
Improving trade, but no protectionism
IMF head Christine Lagarde told a pre-meeting news conference she believes they can work successfully with the Trump administration to improve trade by reducing subsidies and other trade distortions that limit competition.
But she added must reject “protectionist measures”: “The IMF is not the trade organisation, but we are concerned about trade, because it has been a major engine for growth, so we will certainly be looking at how we can participate in that, how we can continue to support the growth of trade, and how it can be done in the most efficient, fair and global way possible.”
Lagarde</a> on US: Have every reason to believe we will cooperate to support and improve global fin system. <a href="https://t.co/bH5xwX00ga">pic.twitter.com/bH5xwX00ga</a></p>— IMF (IMFNews) April 20, 2017
Greek bailout issues under discussion
The Washington gathering is also an opportunity for more talks on IMF participation in bailout loans for Athens.
Greece’s Finance Minister Euclid Tsakalotos is due to meet Lagarde and the German Finance Minister Wolfgang Schaeuble on Friday.
Greek government spokesman Dimitris Tzanakopoulos said on Thursday that the IMF may finance Greece’s current bailout programme with a small amount for one year.
The fund’s participation is seen as a condition for Germany to unlock new funds to Greece.
EU and IMF mission chiefs will return to Athens on April 25, Tzanakopoulos said, to finalise a set of reforms Greece agreed to adopt to convince the IMF to participate with funds in its current bailout.
However, the EU Commission said on Thursday that there was no date yet for the mission chiefs’ return to Athens.
It is unlikely that the bailout review will be wrapped up before May 22, when euro zone finance ministers are set to meet in Brussels to discuss the Greek issue, the spokesman said.