By Ms. Christine Lagarde, Managing Director of the International Monetary Fund (IMF)
I would like to thank President Felipe Calderón for hosting the G-20 Leaders Summit in Los Cabos. Because of his commitment to results, and the support of IMF member countries, I am able today to applaud the pledges of 37 countries—including Mexico and 14 other G-20 countries—to additional Fund resources. President Calderón was an effective and strong voice in our efforts to create a $456 billion global firewall that puts the IMF in a much better position to help its 188 member countries restore sounder economic and financial conditions worldwide. This outcome also reflects the active role of International Monetary and Financial Committee Chairman Tharman Shanmugaratnam.
Global economic conditions continue to face a range of uncertainties, and confidence must be restored. The G-20 Leaders Declaration in Los Cabos is a step in that direction. We have more work to do before global recovery is assured, but I take away from Los Cabos a sense of convergence that will facilitate the comprehensive and coordinated approach to global economic and financial challenges advocated by the IMF.
The G-20 Leaders kept clearly in their sights the ultimate goal of strong, sustainable and balanced growth, and reaffirmed their determination to take all necessary policy measures to strengthen demand, support growth, restore confidence, and reduce unemployment.
We all are concerned about Europe, particularly the euro zone. In Los Cabos the seeds of a pan-European recovery plan were planted. This must be recognized. European leaders committed to take all measures necessary to safeguard the integrity and stability of the euro area and break the feedback loop between sovereigns and banks. Their intention to consider concrete steps towards a more integrated financial architecture is important, and I look forward to discussing this further when I visit Europe this week to finalize the IMF’s annual review of the euro area.
Other seeds have been planted too. With prospects uncertain, advanced economies agreed that fiscal policy—automatic stabilizers and potentially discretionary actions, depending on countries’ fiscal space—has an important role to play should conditions deteriorate, alongside supportive monetary policy. The U.S. is committed to appropriate policy action to avoid the fiscal cliff that risks dragging down an economy that is critical to global economic outcomes ahead. China, and other big emerging market nations, also voiced clarity of purpose to support global recovery.
I am encouraged that the G-20 remains committed to reform of global economic governance, and will work with the IMF toward meeting their commitments to implement the 2010 Quota and Governance Reform agreement this year. As the G-20 Leaders stated, these reforms are crucial to the IMF’s legitimacy, relevance and effectiveness, and will go a long way toward strengthening the impact of IMF analysis for the benefit of all. In this connection, I also very much welcome that the G-20 gave its support to further enhancements to our financial and macroeconomic surveillance.
I believe we all leave Los Cabos with a clearer common picture of what each need to do, and a renewed understanding that our actions in the near term can put us on the road to stronger growth, more jobs, and less poverty in advanced, emerging and developing nations alike.