Updates with statements by Kristalina Georgieva at the final press conference, at paragraphs 3, 4, 5 and at the end of the dispatch
WASHINGTON (awp / afp) – The autumn meetings of the International Monetary Fund (IMF) and the World Bank ended on Saturday with a joint call to do more and better to support the global growth faltering because of the persistence of trade conflicts and uncertainty surrounding Brexit.
New issues have also emerged this week as G20 Finance Ministers ask the IMF directly for Libra, the highly controversial digital currency of the Facebook social network.
The IMF's new Managing Director, Kristalina Georgieva, said on Saturday that members of the Fund had discussed ways to increase "peer pressure" on countries to respect and improve the rules of global trade in order to reduce uncertainties weighing on growth.
Trade tensions between the United States and China have been a major topic of discussion at the meeting of financial leaders this week, she said. However, "we must look for the reasons why we are not making more progress in trade", because it is not only the result of the Sino-US conflict, she said.
"We all know very well that the current economy is much more a service economy, e-commerce, but these are areas that trade agreements are struggling to cover," she also commented.
"Multilateral cooperation is needed to reduce trade friction," said European Central Bank (ECB) boss Mario Draghi.
The week was marked by the imposition Friday, new US tariffs on many European products, including Airbus aircraft, French wine, Italian cheese or Spanish olive oil.
At 3% global growth this year, "there is no room for political mistakes," IMF chief economist Gita Gopinath warned on Tuesday, unveiling the Fund's latest forecast.
And while the recovery was driven by international trade after the 2008 crisis, the volume of goods and services traded will only increase by 1.1% this year. This is the smallest increase since 2012 and a fall from 3.6% in 2018.
While the world deplores Washington's commercial offensives against China and now Europe, US Secretary of Commerce Steven Mnuchin has defended US policy. "We are laying the foundations for future growth through more equitable trade agreements," he said in a statement.
In addition to trade, many IMF member states have expressed concern about the potential impact of Facebook's cryptocurrency on their sovereignty over monetary policy.
While the Libra is expected by 2020, the G7, the Group of Seven Most Industrialized Countries (Canada, France, Germany, France, United Kingdom, Italy and Japan) has agreed that the prerequisite for launching Cryptocurrency stable, like the Libra, was the establishment of a legal framework.
For their part, the G20 Finance Ministers called Friday to "assess" the risks posed by stable digital currencies, ie backed by a basket of currencies such as the euro or the dollar, and to "remedy" before they are launched.
The Japanese G20 presidency has also asked the IMF to examine the macroeconomic implications "including issues of monetary sovereignty of member states taking into account the characteristics of countries".
Kristalina Georgieva stressed on Saturday that the IMF is adopting "a very balanced approach" on this issue, examining both the benefits – to allow as many people as possible to access payment services – that risks such as the threat of sovereignty States.
"There could be abuses for illegal purposes and, in the worst case, for the financing of terrorism," she acknowledged, but she stressed "the inevitability" of the expansion of digital currencies.
"We will continue to work," she added, "in all conscience".
France, Italy and Germany said Friday that the future currency of Facebook was not welcome in Europe. These countries are preparing together a series of measures to ban it on the Old Continent, had also unveiled the French Minister of Finance, Bruno Le Maire, without revealing these measures.
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