BRASILIA--Brazil's government will push for accelerated implementation of policy remedies for the global economy and pending reforms of the International Monetary Fund's quota system at an upcoming meeting of that institution next week, a source from the Brazilian government said Wednesday.
Speaking anonymously ahead of the meeting, the official said that he expected "very little" to be done at the Tokyo event to advance proposed new reforms of the IMF quota system over the coming years, as members were still awaiting the U.S.'s ratification of reforms proposed in 2010.
"The primary discussion among authorities present is going to be about the global economy," he said.
Further IMF quota reform efforts, he said, would likely be delayed by lingering differences over the formula to be used for quota distributions and whether traditional large contributors to the fund would be allowed larger representation. In the meantime, he said, officials would urge internal steps within the European Union to resolve the debt crisis there.
"Due to the structure of the EU, there's always a problem of implementation of what they say they are going to do," he said.
"A part of the discussion is that the EU is going to say that they have announced measures, and the other part is that other countries are going to ask them to put them into effect faster."
While the official acknowledged that discussions would likely be limited by internal political relations within the EU, he said Brazil would maintain its stance that EU members should use more fiscal mechanisms to address the crisis.
"In Brazil we've defended that you can't take only monetary actions," he said. "We need to look at the quality of the fiscal adjustment, such as spending more on promoting investment and consumption actions that have a multiplying effect in the economy."
Brazil's formula, he said, involved taking actions to promote declining debt-to-gross-domestic-product ratios while still allowing the economy to grow with the help of fiscal stimulus.
In addition to examining difficulties in the EU, the official said authorities would also turn the discussions to policy in the U.S. and an impending "fiscal cliff" brought about by automatic spending cuts and tax increases expected next year as the country's debt stretches above permitted levels.
The official said Brazil didn't expect to introduce special discussions on the matter of foreign-exchange measures, but said it would address the theme within the context of the meeting.
"Forex always enters into the talks as part of the wider discussion," he said. Brazil has been a vocal critic of loose monetary policies in developed economies and the massive flows of currency that have invaded emerging-market economies.
An IMF paper published in early September suggested that countries could work to coordinate foreign-exchange controls to avoid the undesired impact of market volatility on their economies.
While the official remained hopeful some progress could be made on such discussions at upcoming talks, he said very little had been done so far through international negotiations to address the matter.
"In the sense of coordination of forex controls, there hasn't been any advance in the discussions," he said.
Brazil in recent months has opted to take trade-protection measures and intervene in the local currency market in an effort to maintain it own currency at a level favorable to local industries.
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Speaking anonymously ahead of the meeting, the official said that he expected "very little" to be done at the Tokyo event to advance proposed new reforms of the IMF quota system over the coming years, as members were still awaiting the U.S.'s ratification of reforms proposed in 2010.
"The primary discussion among authorities present is going to be about the global economy," he said.
Further IMF quota reform efforts, he said, would likely be delayed by lingering differences over the formula to be used for quota distributions and whether traditional large contributors to the fund would be allowed larger representation. In the meantime, he said, officials would urge internal steps within the European Union to resolve the debt crisis there.
"Due to the structure of the EU, there's always a problem of implementation of what they say they are going to do," he said.
"A part of the discussion is that the EU is going to say that they have announced measures, and the other part is that other countries are going to ask them to put them into effect faster."
While the official acknowledged that discussions would likely be limited by internal political relations within the EU, he said Brazil would maintain its stance that EU members should use more fiscal mechanisms to address the crisis.
"In Brazil we've defended that you can't take only monetary actions," he said. "We need to look at the quality of the fiscal adjustment, such as spending more on promoting investment and consumption actions that have a multiplying effect in the economy."
Brazil's formula, he said, involved taking actions to promote declining debt-to-gross-domestic-product ratios while still allowing the economy to grow with the help of fiscal stimulus.
In addition to examining difficulties in the EU, the official said authorities would also turn the discussions to policy in the U.S. and an impending "fiscal cliff" brought about by automatic spending cuts and tax increases expected next year as the country's debt stretches above permitted levels.
The official said Brazil didn't expect to introduce special discussions on the matter of foreign-exchange measures, but said it would address the theme within the context of the meeting.
"Forex always enters into the talks as part of the wider discussion," he said. Brazil has been a vocal critic of loose monetary policies in developed economies and the massive flows of currency that have invaded emerging-market economies.
An IMF paper published in early September suggested that countries could work to coordinate foreign-exchange controls to avoid the undesired impact of market volatility on their economies.
While the official remained hopeful some progress could be made on such discussions at upcoming talks, he said very little had been done so far through international negotiations to address the matter.
"In the sense of coordination of forex controls, there hasn't been any advance in the discussions," he said.
Brazil in recent months has opted to take trade-protection measures and intervene in the local currency market in an effort to maintain it own currency at a level favorable to local industries.
nasdaq.com
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