June 21, 2018

I.M.F. Warns Against ‘3-Speed’ Recovery

This week, the I.M.F. released new economic forecasts lowering its estimates for global growth, while also citing dimished risks of a severe financial disruption in Europe or sharp fiscal policy adjustment in the United States.

Ms. Lagarde warned again of a ‘’three-speed’’ recovery, with developing nations growing apace, stronger advanced industrial economies like the United States healing and Europe continuing to suffer from insufficient demand and incomplete government policies.

‘’It’s not the healthiest recovery,’’ Ms. Lagarde said, but added, ‘’We’ve avoided the worst.’’

The news conference came shortly after news broke that a French court had ordered Ms. Lagarde to appear at a hearing regarding an inquiry during her time as finance minister in Paris.

Asked about the affair at the news conference, Ms. Lagarde said that she had known for years of the possibility that she would be interviewed by the investigative commission. ‘’There is nothing new under the sun,’’ Ms. Lagarde said, dismissing any concerns about the investigation.

Ms. Lagarde gave her blessing to recent actions taken by the Bank of Japan to help bolster growth. She also said the European Central Bank had more room to aid a recovery in Europe, where many countries are still undergoing economic contraction, unemployment continues to rise and the credit markets remain broken.

‘’Of all the major central banks in the world, the E.C.B. is the only one who clearly still has room to maneuver,’’ Ms. Lagarde said.

Asked if Spain needed more time for fiscal adjustment, Ms. Lagarde replied that it did. She said the country needed to put a budget-tightening plan in motion, but it need not be ‘’upfront, heavy duty’’ fiscal consolidation. “Spain needs more time and needs to be able to adjust,” Ms. Lagarde said.

At a separate news conference, Jim Yong Kim, the head of the World Bank, which focuses on economic development, laid out his grand vision for a ‘’two-pronged approach for a world free of poverty.’’

Dr. Kim has called for eradicating extreme poverty by 2030 and for fostering income growth for the bottom 40 percent in every country. ‘’For that second goal, we also mean sharing prosperity across generations, and that calls for bold action on climate change,’’ Dr. Kim said.

‘’Doing better on growth means doing even more of the kinds of reforms that have underpinned the strong developing-country growth of the past 15 years,’’ he said. ‘’That means eliminating bottlenecks; additional investment in infrastructure; and, to ensure that the poor participate in the benefits of growth, much greater investments in education and health care. As we move ahead, we also must address climate change with a plan that matches the scope of the problem.’’

Article source: http://www.nytimes.com/2013/04/19/business/economy/imf-warns-against-three-speed-recovery.html?partner=rss&emc=rss

French Central Bank Workers Strike Over Job Cut Plans

PARIS — The French central bank is going on strike.

More than 1,500 employees were demonstrating Tuesday in Paris, union officials said, in a protest against a restructuring of the Banque de France that is expected to result in the loss of about 2,500 jobs by 2020. The bank currently employs around 13,000 full-time workers.

The bank did not respond immediately to a request for comment.

With France a member of the euro zone, it might seem an anomaly that the country even has a separate central bank. The European Central Bank, based in Frankfurt, does much of the heavy lifting for the 17-nation currency area, including setting monetary policy. And it is the Bundesbank, the German central bank, that is mainly responsible for operating the internal euro payments system for big money transfers.

Still, the E.C.B. employs only 1,810 people, and has to rely on the national central banks for support in economic research and market operations, as well as the physical task of ensuring that coins and bills are circulating properly.

The Banque de France has already cut about 25 percent of its work force since the physical euro came into being in 2002, according to a report last year from the French Court of Auditors. But its 13,0000-strong work force is larger than that of the Bundesbank, even though Germany is a larger country. The Bundesbank has cut its staff by 35 percent since 2002, to about 10,000 workers.

The French central bank says that many of the tasks that workers now are employed to do should be automated. It wants to reduce its network in France to 105 branches, from the current 127, and reduce the number of currency processing centers to 32 from 72.

Both Germany and Italy have moved more aggressively than France to reduce central bank overhead since the euro was born.

The Banque de France workers argue that the French central bank’s situation is not directly comparable to that of other euro zone central banks, as it has responsibilities in areas like credit mediation not shared elsewhere. A consulting firm hired by the workers on Tuesday presented a critique questioning the economic justification of the restructuring plan.

This being France, no one is to be fired outright. Rather, operating according to the auditor’s recommendations, the bank will simply not replace half of the 5,000 employees it expects to retire over the next seven years.

Jack Ewing contributed from Frankfurt.

Article source: http://www.nytimes.com/2013/01/30/business/global/30iht-banque30.html?partner=rss&emc=rss

Court Convicts Galliano in Anti-Semitism Case

Mr. Galliano, 50, who stood before the panel of judges in a one-day trial in June, did not appear in court to hear the verdict. The suspended fine was less than the $14,000 sought by the prosecutor, Anne de Fontette.

The charge of public insults for reasons of religion, race or ethnicity carried a maximum penalty of six months in jail and a $32,175 euro fine.

Mr. Galliano, who was fired as the creative director of Dior when the charges surfaced, had told the French court that he remembered nothing about the incidents and at the time was debilitated by job stress and addiction to Valium and alcohol.

He condemned racism and anti-Semitism and apologized to the victims, saying he had experienced discrimination himself because of his homosexuality.

But the prosecutor had accused him of indulging in an ugly variety of “racism and anti-Semitism of the parking lot and the supermarket.”

Article source: http://feeds.nytimes.com/click.phdo?i=9df32992b27baf8a00f28096c4cd3510

I.M.F. Chief to Face French Investigation

The ruling by the Court of Justice of the Republic, which oversees the actions of French ministers, means that Ms. Lagarde may have to gird for a possibly lengthy legal process to defend against the criminal charge.

But legal experts said it was unlikely to interfere with her management of the fund, which was aware before her appointment that an investigation could be called.

“She should be able to continue her duties with no problem because the I.M.F. was made aware of this potential investigation when she submitted her candidature, and they voted for her nonetheless,” said Christopher Mesnooh, a partner specializing in international business law at Field Fisher Waterhouse in Paris.

The International Monetary Fund’s board said in a statement it was “confident” that Ms. Lagarde “will be able to effectively carry out her duties.”

Ms. Lagarde ushered in a new era at the I.M.F. in June, becoming the first woman to take on one of the world’s top positions in finance after Dominique Strauss-Kahn stepped down to deal with allegations that he sexually assaulted a hotel maid in New York.

Her contract contains a section on conduct and ethics that requires her to “strive to avoid even the appearance of impropriety.” Given that she was up front about the matter when applying for the I.M.F. job, “no one could come back and say now you have to take leave or resign — that would be indefensible,” Mr. Mesnooh said.

At issue in the French court case is whether Ms. Lagarde abused her authority as finance minister in a long-running legal soap opera.

In 2007, she ordered that a dispute between Bernard Tapie, a flamboyant French businessman and a friend of President Nicolas Sarkozy, and Crédit Lyonnais, a state-owned bank, be referred to an arbitration panel. The panel ultimately awarded Mr. Tapie a settlement of about $580 million, including interest.

Mr. Tapie, a former head of the Adidas sports empire and a former Socialist minister who changed political loyalties to support Mr. Sarkozy’s 2007 presidential campaign, accused Crédit Lyonnais in 1993 of bilking him when it oversaw the sale of his stake in Adidas.

The scandal-ridden bank was effectively put into state hands, and when Mr. Strauss-Kahn was finance minister in 1999, he ruled that the state was responsible for dealing with Mr. Tapie’s claim.

But it was Mr. Sarkozy who later suggested that the finance ministry, which by then was headed by Ms. Lagarde, move the case to arbitration.

Ms. Lagarde has defended her role numerous times in the case, at one point declaring the allegations to be a smear campaign and vowing that she acted with “rigor and transparency” to keep the dispute from increasing costs to taxpayers.

The case could drag on for months if not years, legal experts said, as investigators pore through documents. The charge comes with a theoretical penalty of 75,000 euros and five years in prison.

Article source: http://feeds.nytimes.com/click.phdo?i=70e49b02a9dbbe95f2d43080c6bf4d1e