Transcript

Transcript of a Press Briefing by Horst Köhler, Managing Director, IMF

March 4, 2004

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MR. KÖHLER: I want to tell you that I am deeply honored to be nominated for the Office of the Federal President of Germany. I accepted this nomination today, and according to the rules of the IMF, I have to resign immediately with the acceptance of this nomination. So I resigned today.

Anne Krueger, the Deputy Managing Director, will be the Acting Managing Director, and I will, of course, do everything to organize a transition as smooth as possible.

I am leaving the Fund with a "laughing and a crying eye," as we say in German. I am laughing, of course, because it is an honor, it is a new challenge. But I am crying also because I like this institution. It's a fascinating job and mandate. I do think that the staff is as dedicated as you can imagine and that this institution has to play a role to create a better world in a globalized economy and world. And it was for me a pleasure and an honor to work here.

But looking forward, I am, of course, also looking to Germany, the challenges there. I do think that with my national experience, professional experience, but also with my international professional experience, I can contribute to a process in Germany to readjust its role in Europe, in the world, to create a strong economy, a lively civil society, and a good understanding of the Germans in the world and the world in Germany.

This is what I wanted to say in English at the outset.

MR. KÖHLER [in German, translated]: Now, in German, I would like to say that I indeed feel very honored by this nomination by the opposition parties in Germany for the office of Federal President. It is not an office that I had been striving for, or that can be planned in advance. It was a pleasure for me to accept this nomination because it is an honor, and I think that I am well qualified for the task and that, due to my professional experience at national and international level, I can contribute to what Germany needs right now, namely a discussion in a process of change, not only in the economy-but mainly in the economy-not only the economy, because it is also about universities, culture, and social life in Germany. Having worked here for four years, and having worked in the European Bank for Reconstruction and Development in London, I have experienced very closely, so to speak, a working climate and an environment of people coming from a wide variety of different countries, cultures, and religions. This has made me a bit more humble but, on the other hand, also a bit more open, if you will, even more curious to listen to others and then to reflect on what positive and concrete impact this might have on my own country. I hope that I can use this experience in a positive way if I am elected. After all, the decision has not yet been taken and we respectfully must wait for the final outcome. Thank you very much.

Now I would be glad to take your questions.

QUESTIONER [in German, translated]: You are one of the few Germans to head an international organization. Do you believe that your successor will be German, that there is a chance of a German successor?

MR. KÖHLER [in German; translated]: Well, I do not want to comment on that. However, I can tell you that I am convinced that, in addition to Horst Köhler, there are other Germans who are up to the job.

QUESTIONER [in German; translated]: Mr. Köhler, are you concerned about the way the nomination came about, and that yours was not the first name put forward during the nomination by the opposition parties?

MR. KÖHLER [in German; translated]: I think that it would be inappropriate for me to comment on the nomination process at this stage. I believe that, having been nominated, I should be delighted. In the end, by exercising this office, I will have to demonstrate whether or not the right person was nominated. However, this cannot be predicted at the outset. I am convinced that I am up to the task and I am pleased that people put their trust in me. Now I will have to address the challenges.

[Inaudible]

MR. KÖHLER: The question was whether there would be another Managing Director succeeding Horst Köhler, and I said that I would not like to go in detail answering this question, but in principle, I do think there are also other Germans who could qualify for the job. But that is totally up to the Board of the IMF to discuss and decide that.

QUESTIONER: What do you regard as your biggest achievement here at the Fund? What is your greatest frustration that you will leave undone?

MR. KÖHLER: Well, it's a bit premature to say what is the biggest achievement. But what I am a bit proud of is that this institution, before my time but in particular in my time, opened up further to listening to others, developing a learning culture, to draw conclusions out of experience, if you want, also mistakes, because no particular person or no institution is perfect. We need to develop in institutions as individuals a kind of permanent learning culture, and insofar I think we made progress in this institution.

By the way, I am also a bit proud that, despite a major deterioration in the global economy starting early 2000, we are now in a process of recovery in the global economy, and I do think that the IMF, with its crisis prevention and also crisis management, has contributed to this good outcome.

QUESTIONER [in German; translated]: What are your immediate plans? Will you leave tonight? When will you come back? Are you flying to Berlin tomorrow?

Mr. KÖHLER [in German; translated]: First of all, I would like to say that only today did I really realize, was I forced to realize, that I have to resign. After all, this was not planned, this was not the general staff plan so to speak, for me to go to Berlin. Moreover, there are implications that have to be taken into consideration, but they concern my private life. Tomorrow I will fly to Germany, so I will be arriving there on Saturday. The first thing I will do there is to meet my wife and my children. After all, we have been apart for nearly two weeks now. So I will be able to talk to them directly rather than over the telephone, and I am looking forward to that. It will be the first time that we will really have to get together and discuss what it actually means for me possibly to return to Germany and accept a completely new, important, and wonderful challenge as Federal President. So far, we have not been able to discuss this, at least not in detail. And it goes without saying that I will discuss the transition arrangements with my colleagues in detail. I will do that today and tomorrow morning. And according to the current state of affairs, I will be in Berlin on Sunday, Monday, and Tuesday to introduce myself to the parliamentary groups of the CDU/CSU and FDP, and to be available to answer questions.

QUESTIONER: Do you think it is [inaudible] that a European remains the head of the IMF?

MR. KÖHLER: Well, as I said before, this should be discussed--

[Inaudible comment.]

MR. KÖHLER: As I said before, this should be discussed within the Board of the IMF and within the shareholders of this institution.

QUESTIONER [in German; translated]: Perhaps you could tell us when you were approached for the first time concerning the nomination and, particularly, when you received the final confirmation that you were to be the candidate of the CDU/CSU and the FDP?

MR. KÖHLER [in German; translated]: Well, I think that the question as to when I was approached for the first time is beside the point. And it is fairly obvious that I was informed as soon as the result was final. And it is also obvious that it became definite on fairly short notice. I was informed this morning, or rather, last night. And it goes without saying that some friends kept me up to date over the phone. In addition there was the ticker. On the one hand, I appreciated this but on the other hand, I finally reached a point when I said to myself that I would prefer fewer phone calls because I simply wanted to sleep. And then it turned out that I could not fall asleep.

QUESTIONER: Looking back at your tenure here, certainly the developments in Argentina would have to be called a rather disappointing, to put it mildly, part of your record. And I wonder if you could comment on any regrets you have about decisions that the Fund made during this period, and if you could also comment on the current situation you are leaving behind. I realize you are not trying to accept this job just to get out of what has been [inaudible]--

[Laughter.]

QUESTIONER: Could you also comment on where you see things going?

MR. KÖHLER: Well, yes, of course. Argentina is certainly, you would agree, a current case. And I have very much an interest that the situation in Argentina is continuing to improve. And this means that I have very much an interest that the ongoing discussions and dialogue with international creditors, with the IMF, and the international community to agree on a debt restructuring and the way forward to normalize relations between Argentina and the international community go as smooth as possible.

I just do not think that it is appropriate at this point in time to comment in detail, including to comment on what went wrong or had there been, say, failures of the IMF.

What I can say is that certainly Argentina is another case where we have to be able to rethink how things emerged and developed. But I can also say that I do not think that the IMF's role is the role which created the problems or made a solution for the problems more difficult.

Our decisions at the end had always been meant to be helpful, and at the end I do think they will work out as to be helpful to Argentina.

So I am cautiously optimistic. I recognize that there is a lot of good improvement in Argentina. We should really recognize this since President Kirchner had taken over the leadership there. But based on that, on this very positive economic development, I also do think it should now be easier to find a solution for the international debt restructuring.

QUESTIONER: [inaudible] started some interesting and important negotiations with the IMF [inaudible] Brazilian government [inaudible].

MR. KÖHLER: Well, I can assure you that what I discussed with President Lula in Brazil just four days ago is nothing which is only dependent on my person. It is true that I am initiating a new look to Latin America and to emerging markets in general. I do think this is needed because we need to see or recognize again that there is new leadership, like President Lula, who don't need to be told or lectured what is right for their people.

What they need is the appropriate support at the appropriate time, and, therefore, I am indeed in favor of rethinking the instruments of the IMF regarding crisis prevention so that those countries who have the right intentions, the right policy in place, but suffer setbacks, international financial economic setbacks which are not under their control, get timely and proactively support and help from the international community. That is one idea I have and which I very much hope that my successor and shareholders of the IMF will take up further to make it practical.

And there is a second element there. I clearly do think we need to be more creative, and this is that we have to find more financing room for infrastructure investment, because what we need certainly in emerging market countries, as in poor countries, is growth, economic growth. Growth is not everything, but without growth you end nowhere. But to have sustained growth, you need also to have a sustained development based on investment in infrastructure. And this is an element which was in a way neglected, and we do think we need to review that. And both items I discussed with President Lula, Finance Minister Palocci. I have given this report about my discussions to the Board, and you can be assured that I did everything that this discussion continues and will hopefully in the mid of this year also lead to first results.

QUESTIONER: What is your current assessment on the situation in Argentina?

MR. KÖHLER: You see, I said I am leaving this institution also with a crying eye. And one reason why I am crying is that I cannot anymore comment or answer your question because I resigned.

[Laughter.]

MR. KÖHLER: I resigned. It is up to my successor to give you all the appropriate and hopefully helpful answers.

Thank you very much. Thank you.

[Applause.]

[Whereupon, the press briefing was concluded.]