Monday, 15 June 2020, 7:00 pm CEST
In a fireside chat, The Role of the IMF in the Post-COVID19: Fiscal Stabilization and Recovery, jointly organised by GLOBSEC, Bruegel and Institut Montaigne think tanks, Ms Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF) addressed the economic and financial impact of the COVID-19 pandemic and the role of financial institutions in mitigating its dire ramifications.
Moderated by Vazil Hudak, Deputy Chairman of GLOBSEC, the panel featuring Guntram Wolff, Director, Bruegel and Henri de Castries, President, Institut Montaigne, discussed how financial institutions, including the IMF, can help build a bridge to recovery by the introduction of a comprehensive package of financial support to reinforce a swift economic comeback while protecting the most vulnerable segments of societies and economies.
The debate, opened by Robert Vass, President of GLOBSEC, spotlighted the current situation and highlighted potential recovery scenarios in Europe and beyond.
In her opening remarks and subsequent reactions to queries from the audience, Ms Kristalina Georgieva commented on the global policy efforts to-date and emphasised the importance of a united approach in tackling this crisis. The biggest worry for prospects to recovery and future growth, in her own words, are “failing to revitalise globalisation, trade protectionism, growing inequality due to uneven access to opportunity, as well as stagnating education”, and the pandemic has only made this more obvious.
Ms. Kristalina Georgieva admitted that the banking sector is much sounder now than it was during the credit crunch in 2007. Central banks have maintained a higher level of preparedness for any unforeseeable economic crisis ever since and together with governments were able to act rapidly and decisively in the light of the COVID-19 outbreak.
According to the IMF Chief, targeted spending will in the short run provide a much-needed backbone for economic stabilisation. However, countries are advised to ‘keep the receipts’ for the later stage when it’s time to think about debt sustainability. Also, ballooning debts and large deficits need to be counter-balanced by tax reform, focused on decarbonisation and encouraging digital players to contribute their fair share to society through taxation.
“To defeat this virus and to get our economy back on its feet, we need to build a shared platform that will work towards a greener, digital, resilient and sustainable economy. We must reform the system of global trade so it can flourish and countries around the world, developed or emerging, can benefit from this new structure,“ said Ms Kristalina Georgieva.
“We have the choice between reversal and renewal. I hope we make the right decision and embark on a journey that will lead us to a better world. Especially, for the European Union, it is a chance to build up a unity of purpose and share it with the rest of the world,” added the Managing Director.
The virtual debate with Ms Georgieva is in line with GLOBSEC’s mission to facilitate discussions that impact a variety of policy fields and provide practical policymaking recommendations in Europe and beyond, contributing to a better, more resilient, sustainable and prosperous world of tomorrow.
The full debate with Ms Kristalina Georgieva, IMF Managing Director can be watched here: