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BERLIN / LAGARDE
STORY: BERLIN / LAGARDE
TRT: 2.24
SOURCE: IMF
RESTRICTIONS: NONE
LANGUAGE: ENGLISH / NATS
DATELINE: 23 JANUARY 2012 BERLIN, GERMANY
1. Wide shot, German Council of Foreign Affairs exterior
2. Pan right, Managing Director Christine Lagarde arrives
3. Med shot, people at conference room
4. Zoom out, Lagarde takes her seat
5. Tilt down, from Lagarde’s face to folder on her lap
6. Wide shot, Lagarde at the podium
7. SOUNDBITE: (English) Christine Lagarde, Managing Director, IMF:
“Although the economic outlook remains deeply worrisome, there is a way out. Now the world must find the political will, the collective will, to do what it knows has to be done. So, having acknowledged what has been done, let me just offer my perspective on what remains to be done. In my view, there are three imperatives: one is stronger growth; two is larger firewalls; three is deeper integration.”
8. SOUNDBITE: (English) Christine Lagarde, Managing Director, IMF:
“It’s not something that Euro area partners can resolve exclusively on their own. The rest of the world matters in many ways.”
9. SOUNDBITE: (English) Christine Lagarde, Managing Director, IMF:
“We must step up the Fund’s lending capacity. The goal here is not to substitute, but supplement resources that Europe would be putting on the table. But also, because we are not just working for the Euro zone, even though it is the epicenter of the crisis, it is very importantly so to meet the needs of what I call the innocent bystanders.”
10. SOUNDBITE: (English) Christine Lagarde, Managing Director, IMF:
“The IMF would aim to raise up to $500 billions of additional lending capacity.”
11. SOUNDBITE: (English) Christine Lagarde, Managing Director, IMF:
“This is the defining moment. It’s not about saving any one country or any one region. It’s about saving the world from its downward economic spiral that I mentioned at the beginning. It is about avoiding the 1930’s moment.”
12. SOUNDBITE: (English) Christine Lagarde, Managing Director, IMF:
“The longer we wait, the worse it will get. The only solution is to move forward together, because our collective economic future depends on that.”
13. Wide shot, Lagarde at the podium
IMF Managing Director Christine Lagarde today called on the international community to take urgent collective action to save the world economy from a downward spiral.
“Although the economic outlook remains deeply worrisome, there is a way out. Now the world must find the political will, the collective will, to do what it knows has to be done. So, having acknowledged what has been done, let me just offer my perspective on what remains to be done. In my view, there are three imperatives: one is stronger growth; two is larger firewalls; three is deeper integration,” Lagarde said in a speech at the German Council of Foreign Affairs in Berlin.
She laid out the main elements of a policy path forward. Europe, which is at the center of global concerns, needs stronger growth, larger firewalls, and deeper integration, she said, but added that other economies also have an important role to play to restore balanced global growth. As for the multilateral component, Lagarde said that the IMF was ready to help and was seeking to increase its lending resources by up to $500 billion.
“It’s not something that Euro area partners can resolve exclusively on their own. The rest of the world matters in many ways,” Lagarde said.
The IMF estimates that in coming years, additional global financing of potentially $1 trillion could be needed, which the Fund can help meet with additional lending resources.
“We must step up the Fund’s lending capacity. The goal here is not to substitute, but supplement resources that Europe would be putting on the table. But also, because we are not just working for the Euro zone, even though it is the epicenter of the crisis, it is very importantly so to meet the needs of what I call the innocent bystanders,” Lagarde said, “The IMF would aim to raise up to $500 billions of additional lending capacity.”
The leaders of the 17 Eurozone countries have already taken a number of important steps to stem the sovereign debt crisis that has undermined confidence in the world’s financial markets, Lagarde said.
Major achievements include the establishment of the European Financial Stability Facility (EFSF)/European Stability Mechanism (ESM), agreement on a harmonized approach to recapitalize banks and the establishment of a systemic risk board, governance reforms to enforce stronger and more effective fiscal discipline, and the European Central Bank’s decision to make long-term liquidity available to banks.
“This is the defining moment. It’s not about saving any one country or any one region. It’s about saving the world from its downward economic spiral that I mentioned at the beginning. It is avoiding the 1930’s moment,” Lagarde said, “The longer we wait, the worse it will get. The only solution is to move forward together, because our collective economic future depends on that.”
Lagarde also called on European policymakers to create a larger firewall. Without it, countries like Italy and Spain, that are fundamentally able to repay their debts, could potentially be forced into a solvency crisis by abnormal funding costs, a development she warned would have disastrous consequences for systemic stability.
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