Transcripts For CSPAN2 Tonight From Washington 20120925

we underestimate how much we forget of our own ideas. we are just terrible. it is an idea is this kind of homage this fleeting sense of something interesting and it kind of this appears so one of the things i found people doing and i try to do it as well as to write everything down but to keep everything together don't overorganize your notes and put them off into folders and things like that to allow the collisions to happen between your ideas but it's to go back the embrey read all those notes and go back and look at the notes from six years ago, and revisit that kind of self past and all of the ideas that he or she had. that is what place was like for the great land of the enlightenment. they would stitch together passages from the books they read it they would write their own and notes and they would go back every read this book which was itself a kind of remix kind of sample clothing and other intellectual kind of presence their intellectual kind of self in the reading every imaginable people's ideas. mexican president felipe culbert applauded president obama as new policy allowing the qualified young illegal immigrants to avoid deportation. the president calderon spoke on the council on foreign relations in washington, d.c.. it about the drug trafficking and the movement of weapons across the u.s.-mexico border. this is about an hour. >> to have the president of mexico felipe cow roane -- calderone. this meeting is on the record and it is being communicated by videoconference so we beg you, turn off all of your wireless devices, phones, blackberrys, not to vibrate, but off. it's the maximum time of the conversation with the president. my introduction will be an diplomatically short. if you have the president's resume if your papers that were given to you as you entered the hall. let me simply say that president calderone, the yondah stuff five boies earned a bachelor's degree in the law and economics, and master's degree in public administration at the john kennedy school at harvard university. he became, a supporter of the party for the national action party becoming the president of the youthful organization and in the late 90's he became its president. before the 2006 election as president of mexico he served as a deputy in mexico's federal chamber of deputies and of the secretary of energy. and he will leave office in december remember as the president who built the most universities, 96. 16,000 kilometers of highways, the bridge that connects mexico's coast providing faster access and therefore more efficient trade. and the passage of the first employment act which provides incentives for the companies to hire people just entering the workforce. he also faced the daunting challenge of the violent spawn by the drug cartels that left 50,000 people dead. the poll taken this past august showed his approval rating of about 64%. we are so honored to have the president of mexico here with us. and mr. president we welcome you to the podium and look forward to your remarks to the [applause] >> good morning. thank you for your words. it is an honor to be here today. at the council on foreign relations for more than 90 years this institution has to understand the challenges on the foreign policy changes facing the united states six years atoka in my first i told the mexican people that it was possible to transform mexico. i say that we could turn it into a postal nation with a competitive economy and we could build a first site to with more opportunities for everyone. we have mexico in a safer nation with a strong will of dhaka. i can tell you today we have made great strides and help put mexico on the track to make these decisions a reality. i would like to share some reflections on health care we have a stronger nation. let me start by talking of the transformation of the mexican economy. as you know, we have to confront the global kinnock crisis in memory. mexico was particularly vulnerable because our ties to the american economy which was at the epicenter of the crisis years ago half to and we took the necessary measures to prevent this crisis from becoming a major catastrophe. in doing so we were guided with three basic. financial discipline, economic freedom and increased competitiveness in we stayed after the country. first mexico has strong economic fundamentals. many countries put in place countercyclical measures to protect. we implemented significant measures to save jobs and keep our industries afloat. for instance we created specific programs to save jobs and an export oriented industries. we reached agreement with the unions and the company's net as long as the workers accept a third on his salary and the company is set to pay one-third of his salary, the government accepted to pay the of the fifth part of the salary, and in that way we save half a million jobs in the middle of the credit in the export-oriented. we increased government transfer it established a temporary jobs program. in doing so, we created another half a million temporary work for the people. and of course, all of these cost a lot of money which. the public debt has raised levels of almost 4% of gdp in 2010 and we see that today deficit is tomorrows taxes and the market always punishes the lack of fiscal irresponsibility. that is why expanding the public debt is to stimulate the economy and we understood that. once you do if you have to take measures to rebuild your finances. the big mistake made by the many economy starting the crisis was to forget that we can use the public deficits like this. but if you try to use it on a regular basis, you will face sooner or later problems in the deficit and that is exactly what is happening with several economies in europe right now. that is why we've put in place an exit strategy to regain the fiscal balance including several painful measures. for instance increasing the tax revenues come producing the public expenditures, promoting the reforms and the deregulation program. we also sit down with a very inefficient energy company which saves the government more than $5 billion a year in subsidies. thanks to the fiscal discipline, the public debt is a historical low level. more than twice the amount of the total cash, and maintain the lowest inflation levels of the past seven decades cash. another important factor behind mexico's sensibility is our financial sector tenet leal in the u.s., the crisis started in the financial market in the banking sector texaco, the financial sector was not a part of the problem but a part of the solution. thanks to the improvements and regulations, the mexican banks have 16% almost double that recommendation. china of cutting wood or even the u.s.. second, we maintain a strong commitment to free trade. this is easier said than done. remember every g20 summit one of the useful paragraphs in the final declaration always says that all countries pledged to refrain from adopting the protectionist measures all the countries used to say we reject protectionism, in the time and again out of the 20 members put such measures into effect in the following days. only mexico started to reduce the time mexico reduced and enter into the new free trade agreements such as the alliance with colombia, chile and peru, and a few months ago mexico joined the partnership. these will give the mexican trade is the biggest boost into effect. there, work hard to increase our competitiveness. despite the crisis, reduced the infrastructure with the 20,000 rhodes we've built and repaired are equal to the distance between the north and south we also double by building, now it is 140 new public. today more than 113,000 engineers gather each year in mexico in germany and canada. today mexico exports more manufacturing goods than all of the countries of latin america and the caribbean, combined. mexico now accounts for almost 13% of u.s. imports of manufactured goods and in 2005 mexico shared the 10%. ten years ago about 90% of the country's export went to the u.s.. last year the figure fell to 76%. when i took office six years ago, mexico was the inth largest car exporter to the world, and today we are the four largest car exporters to read the second largest exporter of american products in the world, and we buy more u.s. goods than what america combined and more than japan and china together. indeed this transformation of the mexican economy is of critical importance to the economic success of the united states as well. but if we want to guarantee in the long run, we need to do more. we need to maintain north american competitive edge over the other regions and the key to get there is more integration, not less. that is a very important step, but our economy must work to deepen our ties and to build on this foundation. second, this transformation that is occurring in mexico is of pure becoming a middle class nation. of course, it does not mean that we end poverty once and for all. what it means is the average mexican family has a much better quality-of-life than it did a decade ago. according to last year's, mexican families have improved their access to housing such as home appliances and computers, health and education services and entertainment all of which are staples in the global middle class. let me give you for example how they have helped. first, universal health coverage access to health services for every one is a fundamental human right. it is why we made an unprecedented commitment to improve what has resulted in the historical achievement, universal health coverage. and doing so what have built more than 1,000 hospital clinics and rebuilt more than 2,000 more second, expanded educational opportunities. today for the first time every child in mexico can attend elementary school and we have expanded the university involvement from 24 to 34%. third, the stronger social programs. we have in place the strong support programs which include congressional tax and the poor communities [inaudible] attended by the others in town. more home ownership. home ownership is performance in the strength of the middle class deutsch of a combination of the stable economy and the sound financial system and the government supported programs. in the last six years more than 5 million mexican press ministers were able to buy their own house in record figures. so the improvement of the living conditions in mexico reflects in the continent. according to the hispanic center, the migration from mexico to the u.s. has decreased in recent years it finally reached zero in 2010 and became an output from the u.s. in 2011. of course, it can be explained by the border security and the economic downturn in the united states. but there is a short argument and the opportunity in mexico for the key factor of the phenomena and the net migration is zero however, we must not forget it's a national phenomenon for the two countries that have been going on at the united states and mexico and what continues to happen naturally. our economies are complementary. a labor-intensive economy with the ability to supply the capitol intensive economy such as the u.s. would qualify the hard work and mexican workers. this is what i believe an agenda for the future should focus ensuring the migration takes place in the legal, secure and orderly way so the u.s. economy has the strength and that the mexicans trying to get a job. most from the values we share to find solutions to help the many workers which today live in the shadows of the society. i want to take this opportunity to recognize that once again president obama's decision to give some immigrant the opportunity to contribute to the strength and vitality of the united states. it is a positive move for both countries but i apply. and now i want to talk to you about a third fundamental change in my term in office to the rule of law in mexico. i know it is an issue that captured headlines in the united states and around the world. one of the main challenges my administration has had to face over the years the criminal organization grew in power and became a stronger in several places and some parts of the country and even before my term started, violence and crime were across many citizens in mexico. that's why we decided to face the problem head-on with the full force of the mistake. we implemented the strategy. first, to control the violent criminal organizations and support the local government with the armed forces given the timing of the maneuver to rebuild and ray strengthen the law enforcement agencies especially at the local level. second coming of the more important, we have a strength for increasing the size of the force from six to 36,000 officers. they are also better trained, better equipped. we are helping the states do the same and we are passing through a very important in a particular set of cases for new members coming and we are moving towards a more transparent system based on oral trial just like you have here in the united states. third, we are investing heavily in education to tackle the crime. opening the rehabilitation centers for addicts and rebuilding the stages. mexico hasn't been alone in the security effort. we founded the obama administration the strength of the renewed cooperation to face the common problems under the principles of shared response of the. but there is no doubt that much more must be done. particularly when it comes to dismantling the financial operation of criminal organizations in the u.s. and reducing the american demand. we should get to the root of the problem which is the increasing demand for the legal growth in the u.s.. as long as the market continues to growing money will keep flowing to the pockets of the criminals. and of course the best way will be to reduce the demand in the u.s.. but frankly speaking that is not possible. alternative solutions must be considered for the massive profits of the criminal organizations, and that includes the market alternatives that prevent drug trafficking and were causing so much violence. there is another problem that has become vital to the security of mexico and many other nations. how did the uncontrolled weapons to the criminal organizations. with limited access to key factor in the strength of the criminal organizations you can see the correlation between the moment in which the weapons ban was here in the u.s. in 2004. and that is exactly the moment in which the violence in mexico started to grow. and it is clear that the more weapons we have available, the more violence we would have in any part of the world. you can see the same phenomena in africa or central america and other phenomena as and that is exactly what is happening in mexico as welcome. during my term, we get more than 150,000 guns and weapons and more than 80% of them were sold in the american gun shops in the there are mine and then shops in the border with mexico. for mexico it is absolutely unfair and offensive and that so many lives are lost and for the profit in the industry. it is possible to think in the regulation not was here in the u.s. the assault weapons bank. we want to build a c for north america. there is a role in the world. mexico is no longer a dictator in global affairs. we are becoming a nation committed to actively participating in the solutions of the global challenges. for instance, mexico hostage in 2010 was a milestone in the global fight against the climate change. the agreements were an important step towards more effective international finance mechanisms such as the green climate, the mexican proposal to the china resources devotee shouldn't mitigation measures around the world. .. ladies and gentlemen, mexicans are working to build a better nation, stronger, safer country with the will of law prevails as well as more competitive economy if mexico continues on this path, transformation in the future, it is the first call it been a prosperous nation of citizens for understand. this day and age however, no nation can succeed without the support of strategic partners. mexico, the united states cooperate, the more we can build a future for the people rightfully demand. both the u.s. and mexico with their new presidential terms anew. our economies are well on the road to health. the window of opportunity to strike the bilateral relationship cover the upcoming of administrations in mexico with a solid foundation from which to build a stronger future. and i wish my successor all the best. if i look at how far we've come, i have never been more confident with mexico in the united states will continue our integration and strengthening our strategic partners as they face the challenges of the 21st century. it is my pleasure to stay here and of course i will answer all your questions. thank you very much. [applause] >> mr. president, we thank you for those very fine and wholesome remarks. i would like to ask you, inc. you of your interest trade to which you've accomplished, what do you see as the prospects for the united states, mexico and canada in the transpacific readership? >> well, the point is we must understand how important that is for people in our economy. we can get disagreements. we will connect our economy to the most prosperous region and at least two decades and that is india. my concern is that there are inside of perfectionist spirits and local politics and the same as in both the united states and mexico. a lot of people believe the more protected you are, the more opportunity you will have and it's exactly the other way around. for any politician is easier to talk about protection and talk about borders, to talk about real freedom to wish you and your constituents should compete and that is a serious concern and the problem as the protectionism is a gold that appears exactly the middle of the crisis. so, what could be the chance to move forward? one problem i am seeing today for a real advance in this process was delayed one more year. so the aipac meeting will be an agreement this year, which was exactly what we were expect the. and it is necessary to regain momentum in the local society to reach the goal we have the camcorder. probably the political campaign, first mexico, but especially in the presidential campaign here could be a temporary obstacle. for once the american citizens decide this important question, i hope we can move together, common effort for next year and not measurable open date opportunities for our trade economies. >> he mentioned that the north american free trade agreement was fine and we should build on it. a lot of people have thought that the free government could do more to create cohesion and competitiveness in the western hemisphere. is that possible or other disputes between us like maybe the tomato dispute, that holds us back from accomplishing what we might aspire to for creating new opportunity? >> will be a permanent battle. first for this tremendous achievement, which has an historical dimension is masked several years ago. but i think it is possible and it is necessary to build upon the nafta. in particular, we need to do certain things at the same time. one, it's to improve the infrastructure in the border. so there is a lettuce bottleneck in those sites. we are to increase the competitiveness in the infrastrture will be great. second, we should understand that the nafta could provide a lot of opportunity, not only for mexican workers and providers, but also for american workers and providers. actually, there is research in which we can demonstrate the real benefit in terms of jobs and personal income for any one of the states here. some interest strength in the people those benefits. you can come the problem that free trade will say at any time, in particular economics of time as protection and that is the case of the tomato. so it seems like this election is so competitive and there is the tomato precedent and looks like [laughter] incredible if i can say that. but let me tell you that the mexican tomato is very good for american consumers, are cheaper and if you are looking for an improved economy you need to order mexican tomato, not the other way around. but if they tomato is going to select the next president last question before i go to the audience. they want to keep protections down an unfortunate they are going up. you mentioned the unfortunate nature of the tomato problem. what are the prospects of opening energy so that the united states and mexico could collaborate on developing a really necessary asset for our economies? >> well, that is a very important question. i think that today there is a window of opportunity to open a little bit at least the energy sector and mexico. and i say this understanding that it's absolutely necessary because today we have a new challenge in a new opportunity as well. for any public company or on state company, it is monitored and looking for the way in which they can get more benefit with less resources like any other company. in this particular case, along the technology is moving ahead and now technologies are allowing us to get the natural gas in particular, sugar in a very cheap way. the price of natural gas in north american region is going down dramatically. and that is good for industries because it means cheaper energy for any industry in any economy. you can remember that 15 or 10 years ago the price of natural gas is a serious obstacle for the economy. i remember when i was in the set of energy, the price of natural gas was that $12 or $15 today the price is hardly $2 or $3. so that's an amazing opportunity for the region and that means that mexico could be even more competitive because now we have a very high competitiveness in the manufacturing sector. we very well-trained workers. with more infrastructure. with free trade with the united states and with other nations. a lot of very competitive aspects. plus today we have cheaper natural gas, but we have everything that we need and that is opportunity. but the problem is for pemex manager with very few resources used and decide will be the most profitable activity for the company. you need to deceit either to invest natural gas with very short marginal revenues and with a lot of risk because they need a lot of technology and massive investment or to invest in oil, which could cost another $20, $30 a barrel and you can sell that there'll for more than $100. clearly payments should go towards the oil. even in the gulf of mexico, we discover a new field into potter and the gulf of mexico. and we confirm the forecast of god, it will double in a very short time. but let me go back to natural gas. so we need to think, how can we open the natural gas act your in order to promote massive investments in the gas we can get more job creation, more energy efficiency, more natural gas, gas of very low prices come which means more competitiveness for industry, cheaper people and a lot of benefits. but in order to do so, we need to change the legal framework. now why i am saying is there is a window of opportunity. because i do believe that president-elect enrique pena nieto believes it is important to retain the energy as well. if you have the political willingness to do something in the energy there, there is a window of opportunity. so what is going to happen on my site, there is all the political willingness that is required. >> well, we'll go to the audience. i know there are questions here. i would ask if you are called upon to please state your name and affiliation and wait for the microphone to come to you on the i/o there, richard. is there a mike -- >> richard downie hemisphere for defense studies. thank you for your marks and being a witness at the council on foreign relations. one of the hallmarks of your administration was admittedly very courageous decision to confront organized crime and you talked a little bit about the comprehensive strategy to do that. president and lacked enrique pena nieto has talked about making changes to your strategy. have you talked to him or perhaps has your team talk to his transition team about how to make continuity and not lose the games you've made during her six years in office. thank you. >> thank you. first let me express my gratitude because you frame the question exactly the way it is. we are fighting organized crime, which is not exactly the same of the expression called here in the united states. our aim is rule of law. it is rule of law, which must prevail in the country. according to company to enforce to enforce the law, fight organized crime and organized crime is linked with several collectivities, drugs, they make jokes, but also human trafficking and also weapons traffic and kidnapping and a lot of very terrible activities. second, respect the decision of president-elect enrique pena nieto come including the tragedy for security in the country. now, let me tell you that i was following closely the electoral campaign and the candidates talk about -- they were framing the expression this way, we will continue the effort, we will continue this tragedy, but we will make some changes. okay. any candidate felt exactly the same way. when any candidate must ask her changes, i believe myself i could not see clearly what were going to be those differences because my understanding, for instance, one expression is we will use more intelligence and less force. and that is correct. but what is exactly what we're doing is we are improving the information and intelligence capacity. actually, we build probably the state-of-the-art center for intelligence right now. we are using, i recall a conversation i had with president bush when were talking about framing the initiative at the very beginning of my administration. i was trying to explain exactly that. we need more intelligence. we need in a can of instruments and technology in order to be able to prosecute criminals and provide crime. and trying to explain that, he told president bush, have you ever seen this tv show, someone with jack bauer? i want all the instruments. [laughter] that is exactly what were doing. same with the pgr. so we are improving. actually, we are sharing intelligence with the u.s. more than ever. that could be one change, or there could be, what else? we will be more preventive than reactive. but in an indication to be very active in any field. and make some kind of contrast coming from all services, no? of course, we understood even health services needs to be more preventive and we are applying a lot of programs in order to reuse -- in other people. once you have an idea of the khomeini to apply a very reactive treatment otherwise he will die. that is exactly what is happening in mexico. we need a lot of universities to 140 new public universities from greenfield is not exactly on the question of education. it's a question of opportunity for young people. and i understand that the day in which mexico reached for any young people in the country, we could talk a lot of the security problems. so you need to be preventive and that is the reason why we are recruiting education opportunities for young people. but at the same time, you cannot allow that a criminal take one city, substitute because the ideas this, your commits crime is doing some kind of authority to a town or even a city. they threat or bribe the local authority so they become the new authority there. they start to apply their own law. they start to collect their own taxes and they started to use force. actually, in that sense it's a challenge to state. now, instead of government, are you going they way in which you can be all the universities in that town, and kidney weights several years on all the key paths to those universities? how many years is going to take that? what is going to happen to the people in those 10 or 20 or 30 years. there is no option to act. and that is the problem of mexico proper because this lack of actions of the government allow the criminals to take over a lot of bridges. a memory to you, this is not only fighting the criminals, but then the violence were not. of course there is a relationship, yes. but frankly speaking, i do believe that the violence will be fair, even without the action of the government. why? because we are now in the faith of a new criminal phenomenon. last century, that is what the words mean. traffic is a problem of calculus as i can that. it's only one dimension if you think from the pacific sea to the american border. one highway in one single point in the border. but what will happen the last two decades? the criminals start to think in another business, which is job retaliate and mexico. how many people do need in order to grow one pound of cocaine to the united states? 10 people, 50, maybe 100? okay, but how many people do you need in order to distribute 1 million bags of one program of cocaine? you will need hundreds or maybe thousands of people. a lot of people distributing. and upon not, the thing in the old business if i can say that, they only need to care about one lane towards the united states. but if they are going to go into the retaining business, they need to cover the whole territory. that's like think about pepsico. it's exactly the same. they're trying to cover a territory. in order to cover a territory, they started on what each other and disputing other territories is not the actual government itself. in other words, when our economy started to grow our mexican income capacity went up one up from $2000 a year to more than $10,000 a year today. and that implies the mexican market started to be an important market for vehicles, for households or whatever, including drugs. so they started to see our society is a market as well. and then they have diversified their activity for the exporting, if i can say that, to distributing mms change they have started to fight each other for the territory and that/, that explains 80% of the violence because of the battle between the setbacks, the pacifico or now it's the subfloor against their old allies and they are flashing each other and today probably there is another inside said of itself. so the problem -- the first is my answer, i yield the opportunity. that may tell you, i do believe the next administration is at least exactly what they are saying. they're going to continue the effort and i think they have the right and the duty i suppose to elect another. now let me be honest, you really want to think about another opportunity. i cannot see anyone different to think about the regulation talks in the global market starting here in the u.s. that is the reason why i say, if we are not able or you are not able to reduce the amount for drugs in a dramatic way, you need to think of different alternatives and you have the duty to analyze any other alternatives in order to stop the flow of money towards the hands of the criminal. and that implies event alternative markets forget. if you want to talk about the real way to do this thing, that is the only way. the other is to give the power to the criminals and say i want side with them anymore. please be my guest. you like discovering that, let's take that government. i like it so much, but i won't fight. you cannot say that like a government because the first duty of any government is to preserve the right and security and that is a very tough duty. believe me, i know that. >> yes, please. microphone. spare sad stance i'd >> and christopher burton, i have a related question and that is the movements of arms and bulk cash in mexico from the united states. what is your administration done to strengthen mexico's own border security to prevent this illegal flows. thank you. >> well, talking about weapons, 150,000 weapons in five years is a lot. we are establishing some kind of highway. we are working really hard on not still. talking about illegal cash, it is more difficult for us. for instance, we are estimating three years ago, two years ago only in the banking or we detected that 14 billion, 14 billion a year, which was dollars we needed to send back the united states coming from the banking system. we have not cleared the sources of those dollars. so that may does take a lot of measures. for instance, we forbidden a lot of cash transfers in dollars and mexico. and of course i got a lot of rejection, and implies my own party, but it is necessary. we are reducing dramatically that kind of not well explained dollars for the system to reach 4 billion -- 4 billion a year today to where we are reducing dollars. the other percentage to the congress a bill in order to regulate want your money. i was like two or three years ago. tomorrow will be again in the chamber. after tomorrow will be again in a benefit. we are a net approval. there is no legislation in the congress. actually, i really appreciate that there are four senators here with me today from different political parties and i think there's a very good chance that we can finally find an approval on this very important role in order to find money. there are a lot of ventures. for instance, we are asking the people come you cannot pay in cash, for instance, when you buy a house you need to pay via check, which is obvious in my understanding on a lot of things, that some people don't like that. >> i think we have time for one more question. when they come to the site of a man. >> margaret daley haze of evidence-based research. thank you very much for your very encouraging remarks about progress in mexico. you are very of opening a large number of universities. can you talk about what mexico is doing command needs to do to expand and improve primary and secondary education in order to enhance competitively. >> very committee are important. let me talk about what we did. we reached an agreement with a very important player, which is the union of teachers. the union of teachers is a small organization with 1.5 million members. last night and we reached an agreement in order to improve the quality. there are several measures that we agreed and those were first. in the past, a possible feature was decided by a finger points, either the union or the governor. today, for any position of teacher is decided by a contest between teachers. so today you want to get a procedure, you need to compete with other teachers in order to select the best plan and that is reforming education. of course, a long way to do that, there's almost 100,000 new teachers appointed that way. and that implies a very painful process. for instance, we suffer several strikes in several states, but that measure is a good one. second, we are establishing another weeding process for students and for teachers as well. and of course there's a lot of presidents for that, but we got a special excellence in order to analyze the level of the teacher. it's a question that we need to see and order to have you improve your capacities. third, we improve the infrastructure in the schools. the alma mater, by the way, let me tell you education is a matter of a local level of government. however, we understood that local government probably they have not enough money or they have another priority to improve the quality of the schools, elementary schools. so they started to reveal the window, the field, the bathrooms are gross and so on. i do not send we have rebuilt powerbook works. courts, we are establishing a new system of payment to the teachers. because we are introducing economic incentives. so if you are a teacher, the more your students improve, the more salary you aren't. so in that sense, we are paying in terms of the quality. you want a very small piece of the salary improved. finally, we reached last year another very important reform in which the so-called was mainly oriented to pay to the teachers in order to how many you have. i don't want to make examples of what they were taken, but today, 50%, which is linked with the money they receive, 50% depends on the improvement of your own student. according to what we are doing a year after year. now, one could be for instance the past. in six years, we established our goal and we are reaching -- but overcome in 2009 should be the same this year. mexicans to, students that it fans the most. so in particular, in 65 countries, of course mexico is probably still today one of the last countries unfortunately. but we advance a lot particularly in math. we are measuring, for example, we had last year to this year, for instance, if our goal was to reach 40% of the good of bucks on students, we overcome our goal in that sense. we are not doing the same unfortunately vanish, so we have to improve a lot. talking about the challenges, i admit that this is probably one of the most demanding challenges for mexico today. it is absolutely necessary for in terms of quality of education and you need to get more cooperation coming from teachers unions. there are two kinds of teachers unions. there is a reputation, but the other one could be worse. [laughter] someone is a lot of things we need to improve and that is for instance a new percentage of the congress last month in order to reform the labor law to outbid transparency with finances and the union and establish direct universal and so on. but there is another group, another union, more radical. they take the control, even of the payroll of workers. so there are some governments in mexico they need to give the money to the union teachers in the union pays the salary according to its own criteria. so unfortunately, this is my own state. but that is a problem. >> mr. president, we could go on all morning. we really detained a mac for your presence, but also your wide-ranging remarks. [applause] let me make a request. let me make a request to the audience. would you please come out of courtesy, stay seated for just one minute and a half so the president can exit with his party and get to his next appointment on time. just a minute and a half. [applause] >> president calderon is expected to attend the united nations general assembly wednesday in new york city. >> i want c-span every time a special event on. anytime something is going on, i want to watch c-span because they typically have the best, most unbiased view of whatever is happening. if i want to get sadness brokaw watch a news organization. i watch them online. simply going on i want to know what's happening. i was turned to c-span. i don't know that i have a favorite show. for me it's always just anytime i need to know what's going on, i never c-span will have the real story of what's really happening. >> today, christine lagarde said uncertainty in the euro zone and the u.s. economy is going down the global economy. she also talked about the fiscal cliff and political climate in the united states as well as the role of central banks and monetary policy played in the global recession. from washington d.c., this is about an hour and a half. >> let me welcome all of you today to our peterson institute for international economics for a very special event in honor of christine lagarde, managing director of the imf since july a year ago. madam lagarde has obviously been playing a very central role in the management of the global economic and financial crises from its outset, from the prior position as minister i. manson rant and continuing of coors at the home of the imf. she famously attended some of her high school in earlier days here in bethesda. she is a lawyer by training, spent much of her career at a current mckinsey becoming chairman of the global executive committee and then chairman of their global strategic committee in 2004. she then joined the french government in 2005, originally as minister for foreign trade of them as minister for fisheries her brief time and then in june june 2007, just in time for the crisis to hit, she became the first woman to hold the post of minister of finance and economy of any g7 country. a rather notable milestone. she reminds me of is a couple of french men and a frenchwoman who can play a critical role in dealing with the world financial crisis going forward and indeed, that is the case. she should do at the same counsel during her. as french finance minister and then in the g20, as france chaired the g20 and 27 was extremely active in trying to build a lasting reform program to respond to the economic problems uncovered during the course of the crisis itself. she has received numerous honors, too many to repeat, but the "financial "financial timesr european finance minister of the year 2009. she's one of time magazine's top 100 world leaders. she was ranked fifth best executive woman in europe and "the wall street journal." i don't know who could have been higher. [laughter] works better as the seven month influential woman in the world. i don't know who possibly could have been higher. along the way she's had two sons, was a member of the french national synchronized swimming team and so she has had a rather notable and amazing life. it is a great privilege and honor for rest or post you, not an lagarde, managing director of the imf about the world economy, managing director. [applause] >> thank you area much for this introduction. actually remind me of my son because when i was a word of this wonderful title of being the fifth executive woman in "the wall street journal," that was back in my days as chairman of the firm. i was quite pleased at that. i called him and said i've been nominated to sit the executive woman in europe and two of them said, that's all? not who is ahead of you. and then they said now you know how it goes when we come home and we have 16 out of 20 and you say that's all? [laughter] no good afternoon to all of you. thank you very much for being here despite the beautiful son that is calling us outside this room. we will try to make a sunny, but will try to make it realistic than anything else. i would like to pay tribute to you, fred, today because you will be stepping down as director of the institute ended the year and i am very excited i could deliver and i promise on this occasion of the curtain raising of the imf annual meeting taking place in tokyo. now, you've asked me to just remind the audience that peter is -- fred is not retiring at all. and we count on you to be actually loyal to you principles. the two principles think a lot about shoe. first of all, your devotion to putting nni and the policymakers and that is not an easy thing to do. international considerations don't go by that easily with policymakers, neither here, gartner, or anywhere for that matter. the factor one is your very deep believe in the fact that policy action, action makes the difference and that is one of the things we will dwell upon in this presentation. now i've not always agreed with you, fred, and on occasions who will disagree in the future. you will continue to make your point, but i am very keen to keep holding policymakers beat to the fire and i can trust you to do that in the future. and of course i am very pleased to continue our collaboration with your successor, adam posen, who is not with us today, but will be taking over. in a few weeks time, global economic policymakers will gather in tokyo for the imf and world inc. annual meetings. so i got together with fred that this would be an ideal time to take stock of where the world economy stands and more importantly what we think is to be done. in fact, this is really my main message today. the urgent need to initiate, executes, implement the policy actions required to secure the billboard recovery. promise -- the promise -- as miles to go before i sleep tonight promises to keep. that is the line by the poet, robert frost. the policymakers have actually made important promises and i would like to focus today on how those promises can be kept and why they must be kept. but in that context i would like to say a few words about the global economy before we delve into those promises. the imf updated forecast will be released in tokyo in a couple of weeks. so today i will just mention the bread directions, not give you the specific details that have been referred to. on the first of all begin by saying that in our view, many rate decisions have been taken. most recently, initiatives by the major central banks, the european central bank with the omt, the outside monetary transaction, qe3 by the u.s. federal reserve with a special focus on the bank of japan expanded asset purchase program. all of that hard date policy signals, clearly in the right direction. they point the way forward and they create an opportunity to build on what has been done. an opportunity to make a decisive turn in the crisis. and for some of this policy actions, particularly of the ecb, certainly a turning point. central banks are clearly playing a key role and just a central banks were misguided during the great depression and accelerated that crisis, it may well be that central banks will have played them will be recognized to have played a significant role in pulling the global economy out of this great recession. but we should not get ahead of ourselves. the global economy is still fraught with uncertainty, still far from where it needs to be. and the situation is a little bit like a jigsaw puzzle. the pieces that our two plays, but the whole jigsaw puzzle is not yet assembled. we sort of know what the country pictures should be, but the whole piece is not come together and that will depend on delivering on the policy commitments that have been made and in that respect there is still a way to go for promises to be delivered upon. now, what do we foresee? we clearly still foresee a gradual recovery, but the global growth that we have forecasted 12 months ago, that we had six months ago is likely to be had a little bit weaker than we had anticipated. so little bit weaker, small points for sure. but what is characteristic is that we have also trained a downward. when you look at our numbers for the last 12 months, the trend is downward. the number of factors are weighed the global economy down. at the center of them, clearly we see uncertainty. uncertainty about what policymakers can and will deliver on their promises. ms is having not tangible, but real facts increasing divergence of economics fortunes in the u.s. and recovery in the united states of america. and now, in terms of directions as i said, we are also seeing some effects on a global basis. slow down in emerging markets. that is a recent development. great concern in low income countries about rising food prices and volatile commodity prices. and finally, growing frustrations in the middle east. at the same time, many of the big legacies from the crisis risk becoming more entrenched. now what am i thinking about that could be entrenched? clearly, unemployment and a massive human cost of people being away from the job market for so long that their skills, their training, their background was forgotten and that is particularly true as the young people in those countries where growth is too slow, too low to accommodate joining the job market. i'm also thinking about the lasting burden of high public debt, now what levels rarely seen except in terms of war. for many economies in the present circumstance is, it will take years of fiscal adjustments to get back to precrisis levels. and again, without sufficient growth, we should not delude ourselves. it will be painful. fourth characteristic, long-lasting unemployment come exceptionally high levels of public debt, clearly the lasting cause of a poorly functioning financial sector. now worryingly, the energy to them lament the reforms that have been agreed as well as other reforms that we need is fading a little bit. i'm often asked and i'm sure that some of the central bankers are supervisors asked the same questions. are we now better off than five years ago? probably so. are we out of the loop? do we have everything in terms of protect in the systems? most people, supervisors and particularly the imf will say not yet despite major progress. now, i know all of this seems a little bit bleak, but let me assure you we have not overlooked the reaction to recent policy announcement. and those are strong and good positive reaction. we have seen positive market responses before they turned out to be short-lived. so this time, what we need is not just a balance. we need a sustained rebound, a sustained rebound, not a balance because this is to be different, when you certainly untrue insurgency more than uncertainty and decision makers to turn into action takers, which will require courage and the ability to rise above the short-term agenda of the boundaries. in that context i would like to focus on this issue up, says in the policy challenges associated with promises powershift they are delivered calls for action. i will touch on the finished agenda for europe and the united states, which both pose critical risk at this time. i will touch on the mounting pressures and the rest of the road, emerging markets in low-income countries and i will mention the commitments that the imf has made, members of the imf has made where we had delivered on the promises. let me first of all turn to europe and the united states. the europe and the euro zone at the epicenter of the crisis at the moment and where the most urgent action is needed. we have seen a series of policy messages. serious improvements, including, for instance, the spanish recent program for capitalization, even before the ecb made its announcement with the omt community which explains how the european central bank would embark. now what they want to see and what we think is impossible is court native implementation. court native implementation because it is a sophisticated game that is played by multiple players at multiple layers of intervention. let's take a few examples. when that comes to mind naturally is the issue of european union banking, effective ranking union in europe. we have located this for some time. we continue to believe it should be initiated as soon as possible in order to break the vicious circle between banks and sovereigns. we are not naïve and we know that it is going to take time. but the first of european common supervision needs to be initiated and pursued rapidly. this will require to deliver on june 29. they have the european council at that time and they made the commitment. it was a rather short for those of you who are aficionados, but they have to deliver on that. and in particular, you will remember that there was only between the european supervisors, the new entity that will supervise european banks and the ability for the european stability mechanism to recapitalize directly without going through the sovereign and that is a trick about cutting the link on this vicious cecal between the sovereign and the banks. .. fiscal adjustments needed for us to get back. equally, it may be tailored to the needs of individual countries. and to ensure a fair burden. at the same time from the international community must recognize the huge efforts being made by these countries and provide them with the support they need, including financing. we favorably consider that this be done in a timely unfixable manner in order to ensure success. the last thing we want is for programs to be off-track. so how do we do that? well, we slow the pace of physical adjustments. it is certainly an issue that is in relation to portugal and spain as well. and we have our views about greece. second, by focusing on measures rather than targets -- when circumstances are such that the targets will not be reached. not because the country is lax about it, but it cannot be reached making sure that the measures are implemented. above all, in addition to slowing the pace of needed, in addition to focusing on measures, certainly what we are mindful of is that we should be clearly focus on growth as well. because we believe that the two are not mutually exclusive. in the programs can be tailored in such a way that some growth friendly measures are identified. the eurozone remains the greatest risk for the global economy today. as i said earlier on, the ecb move from two weeks ago and it was clearly a turning point. but the countries have to really work together, much more coordinated manner in order to work together. as you know, the european union and the eurozone are not the only threat. the united states is also currently a threat. the concern is that many of you know that under the current law they would be equal to 4% of gdp, that is part of the fiscal court. and that is good, 4%. the problem is 2% of gdp, and that is not good at all, especially to consider the forecast of growth of the united states is in the range of 50%. that is abating any growth in the united states the consequence of not dealing with the fiscal cliff and the debt crisis, which is looming. and just for the united states of america, it is a threat to the global economy, given the size of the u.s. economy and its linkages with many other countries around the globe. so we all hope that despite political calendars, entails a degree degree of uncertainty and there will soon be a nonpolitical clarity and no political gains to achieve focus on removing this uncertainty and making sure that both the issue of the fiscal cliff and debt ceiling are addressed separately. that is for the short term. clearly, the medium-term, as in the case of japan, there should also be a clear indication of what is the plan for us to reduce deaths going forward in order to create an environment where this can be built on a safer basis. let me turn now to the challenges facing the rest of the world. each and every part of the world has to also the liver. and i told you that emerging market economies and in low income countries, promises have been delegated upon. because in the crisis, when it hits, they were in the darkness. emerging markets were able to move the global economy in terms of needs and low income countries, because they have suffered were able to resist the crisis. but after several years of very strong growth for some of them, some of them double digits, clearly, that is shifting and illusion of decoupling, has definitely vanished. the major emerging markets are slowing. that will be reflected in our forecast as well. they must follow through on actions needed to position themselves as the potential global growth leaders for the future. the focus should be on countering vulnerabilities. what does that mean that? that means fiscal tightening on hold and even putting in place the right degree of stability, as well as recently done in china. they were recently announcing this. for other countries, it will mean ensuring that high credit growth does not compromise financial stability or jeopardize future growth. but for all of them, what is the key, will be to prepare for the potential spillovers from the crisis affecting the events economies. what can the imf do? well, we can help. we have reframed some of our instruments. the flexible credit line, for instance. the precautionary and liquidy line, which are both instruments aimed at helping countries that are having the right side of politics in place. many countries have actually use those facilities, as in the case of mexico and colombia and poland and morocco, more recently, regarding precautionary and liquidity lines. those amounts together actually exceed the amount of commitment that we have for europe. turning now to low income countries. they have performed relatively well through the crisis. frankly, when you look at numbers, starting from a low base, admittedly, the numbers are generally advanced in emerging market economies. but today, they are more exposed to shifts in economy fortune. i do not simply mean the potential fallout from the events economies, which would be a clear case. but sometimes more of a effect and the slowdown affecting the emerging market as a result of the crisis in the advanced economy that is actually exposing them. take the case of african countries producing raw materials, the generally supplied emerging market economies, such as china. they will be subject to fall back of the advanced economies crisis. also thinking of the 20% increase in global food prices since june. if you stop segmenting in cereals, as because that is one of the most frequently inflated and used food, if you take just maize and wheat, the prices of which increase by 25% in july alone. if you apply that to a country like lesotho, a where they were hit by a drought, especially one of all, quality policies prepare those countries to defend against the crisis. they have to continue those policies that they put in place prior to the risks. at the same time, they cannot necessarily travel that journey all by themselves. the international community needs to lend even more of a hand to help them help themselves. that includes ensuring sufficient financing, for instance, the imf. we have a facility that is called the poverty reduction and growth fund that is specifically dedicated to lending to the low income countries. now, that particular fund needs to be replenished. and i certainly want the replenishment to be completed at the tokyo annual meeting. i need a 90% majority of the imf to support it, and we are making huge progress. it was characteristic to see the low income countries volunteering themselves by actually committing to profit from the gold sale that was done by the imf a couple of years ago. in order to implement that. and i certainly hope that our country, including advanced economies, do that as well. another point i would like to mention is what the imf has done and will do in the middle east. clearly, it is an important part of the world. we are in the midst of massive transition that is happening and we will be discussing that at tokyo in our annual meeting. we have all been shocked and saddened by the events of recent weeks. the sacrifices that have been made, the suffering that has been endured, make it all the more important that we keep our eyes on the big picture. the initial promise of the air transition. the air of the transition. transitioning through regimen change is never easy. it takes time and training an adjustment. people are not necessarily prepared for that. they need to be able to formulate strategies and they need to build consensus. they need to move forward and generally they haven't had any training. and it takes time to build the foundation for growth, which is clearly something that must be high on the radar screen, as well as employment. these transitions also need external support. some of the partners, some of the members of the deauville partnership have yet to deliver on their commitment. it is not necessarily to be by way of budgetary contributions. it can take many other forms. i was recently reminded when i was in egypt by one of the high ranking technical experts, working and helping the egyptian authority, what they were most concerned about was market access. clearly down the road, it has a competitive effect on economies. it is not actually budget considerations that are needed for those countries, but better market access, technical assistance, and those issues that are clearly on the minds of those authorities and their populations. the imf can help. and they have helped and they will continue to help. we provide a lot of technical assistance. jordan, for instance, is a major recipient of technical assistance. so is tunisia. we don't only limit our role to technical assistance. we give advice, as well. we lend to those countries. we have already committed more than $8 billion in three the countries where we already have programs underway. there's a lot at stake in making sure that that turned actually creates jobs for the young people. that brings me to my final point. what about us? what about the imf? we have a changing global economy. as a result, the imf must be changing and adjusting to this new role, if you will. much of this is under way. i will mention three areas where clearly changes underway at the imf. first of all, we are strengthening our surveillance. with the purpose of participating in strengthening global stability. trying to better connect the dots between countries and focus on the stability of the system as a whole. there are three upgrades not regard. one is a new decision that provides for deeper analysis of spillovers and cross-border effects. you know, we have the traditional bilateral approach to surveillance, and then we have intellectual surveillance, a bit under find. built from the bottom. we are bringing the two together to have a better view. the second is the new external sector report. it sharpens our assessment of countries policies from a multilateral perspective, including exchange rates. we have to have a state-of-the-art mechanism that addresses on a unilateral basis, the issue of appreciation, under appreciation, appropriate appreciation, as clearly in the mind of many others. also, third, a greater analysis of the critically important financial sector. i have mentioned earlier the lack of progress in the financial sector reform, particularly when it comes to derivatives, products, central clearing platforms and the like, which will be behind schedule, compared with the initial agenda that was set. we must be equipped with a system working together that will actually raise the flag and the alert -- we must be on alert when things go wrong direction. so strengthening our analysis components, are tools, in order to strengthen stability, that is one goal. the second that we need to do is to actually strengthen our global financial safety net. some of you have noticed that we have secured a significant additional funding from the membership, a total of bilateral loans in the range of 456 billion u.s. dollars by way of bilateral contributions to add-on or quotas, as the national basis, and the arrangement. that is for the general fund resources. there are other funds that i mentioned, which is the poverty reduction and growth fund, which i want to see the bonus -- replenishment as we go forward. in addition to financial stability and global safety net, that is the strengthening of governance. we strive to keep up with a changing world. we have tried reform. ever since 2006. there is already been a shift towards emerging market economies, for instance. but in 2010, the reforms decided by her membership. and we have made very significant progress towards delivering on that promise made by the membership. the fourth reform is a quote of reform. increasing significantly the quotas. well, for that, we needed to have a 70% vote. we are in excess of 90%. we are at 73%. on that front, the quote increase, that can only be triggered by the government's reform, which is also voted. there we have two triggers. one is i need to have 113 members. saying eskimo we want that. the second is an 85% majority. that is a very high threshold. we bring everything we can as clear as possible to the finishing line. and i have good hopes that that will be the case. when promises of the membership come together. it will increase the quota shares of dynamic, emerging, and developing countries by serving 6%, making it a total of 9% shipped since 2006. it will mean that all of the bric countries will be part of the top 10 members in the membership. and it will create an all electric board. as i said, i think we are getting close, and i will certainly spare no efforts to make sure that we expend the resources. that is the part that we have embarked on. multiple promises made by multiple players, multiple layers of intervention, more sophisticated than we were used to, and certainly one that we try to adopt to constancy, making sure that we always remain relevant, which means independent and credible because of the quality of the advice that we give. clearly, he was talking about those promises and talking about the roads to take, while clearly hope that we can take that road together and see each other under even better circumstances. thank you very much. [applause] >> are managing director, thank you very much for sharing such a wide range of critical issues. let me abuse my position as host to read a couple questions. i would first like to ask you a question, not only is in your current role as managing director, but your former role as finance minister of france pretty focused on the eurozone is the epicenter of the crisis and the need for action. and quite rightly, i think, you emphasized moving ahead quickly on banking and physical units. he would be among the personnel that these are deep, delving into national sovereignty in europe. some of the skepticism and market goes to the question of how far the europeans will be willing to go on that. singularly banking unions, where national governments in europe have been quite jealous of their control over their banking system and their relationship to the role of the state and all of that. talk to us a little bit more about what makes you confident, but the european country countries will emerge sufficiently to move to a fiscal union and if that occurs, does europe come out at the end of the process a much stronger entity than we now worry about? >> if they manage to organize that fiscal union, have the mechanisms in place, we will come out much more stronger than they are today. there is no doubt about that. number one, they have already traveled a long way. remember, when europe was facing the crisis as a sort of consequence of the crisis that originated here in this country. the thing that was constantly mentioned was there should be no bailouts. because the treaty. we could still argue that there should be no bailout, but clearly there is well underway to organize for the mechanisms to respond to the states that are in difficulty. the european financial stability fund, followed by the issue would have been unheard of. the budgetary process the results from this, which is a secure name for a set of rules, the budgetary process would've been unheard of three years ago. and certainly when i was minister of finance, we were beginning to see how the budget. you know, think about it, the budgets would have to be cleared through the european institution, such as the european commission, and be screened by partners before it is discussed in detail by the national parliament. that is a big move, you called it the 70-point of view. i think somebody can be accommodated. but having gone through the european institutions and euro partners has done. the firewalls in place. bsn will be operating by the eighth of october. penalties are in place. clearly, there is more to be done. this european banking supervision will be a case in point. how will it be done? how encompassing will be? i think there is no debate now that the european central bank will be right in the middle of that and we'll will have the ability to supervise that and elevate any of the other banks that it would like to scrutinize and supervise better. all of those will be test of the want to perfect. between the two, there will be a middle 3 between the two, there will be a middle point that will make sense for the europeans themselves and european banks. i just happen to think that actually organizing that, organizing and soundly will appropriate review and tests of the banking system itself, will be a significant improvement for europe itself. >> let me ask you one other question as you discussed towards the end of your remarks. we greatly applaud your use of the external sector report. especially to intensify the role of the revolution, but i would like to ask you a question. as managing director. now do you have the tools, what do you plan to do to move forward, recognizing that you have to bring your states along, but what do you plan to do by way of it yourself? also, your report was helpful and candid. it says quite clearly that we are very largely persistent imbalances and there are extensive reserve build outs and misaligned exchange rates, such as china, that was the biggest, but lots in that area. one could argue that this is a cardinal failing of the multilateral system today, because the whole system was created to avoid a repeat of the devaluation of the 1930s. we have similar activities today, but the multilateral system has not yet effectively dealt with it. now we have new tools and we call for action. what can we hope for? >> well, we are going to use the tools. the tools have been approved by the membership. you know, i think that is probably going to be an unnoticed achievement. but the executive directors of the imf who are in the room, my board members, certainly are very modest. he would be the first ones to recognize that, agreeing on that decision, agreeing on -- i'll make it simple, because it is a very complicated and thorny issue, essentially bringing in the assessment of a particular set of domestic market policies. that was a huge achievement. because nobody likes that. the membership has endorsed it. my board has actually proved it. the same is true for the external sector and the approach it would take, which takes into account policies of the country and in which obviously, there is over appreciation and under appreciation. we will be using those tools and we will be saying so very clearly. >> did you imagine the fun blowing the whistle or consistently in large quantities, keeping their exchange rates undervalued? >> don't forget that is in article four. the bilateral review of countries policies. we include the exchange rate currency. i am pleased to say that many countries, including the key players do not object to those reports being published now. so it is a question of leveraging that and using it going forward. >> okay, open to the floor. let me ask you to view to identify yourselves. either use the standing microphone or take one of the other microphones a wound and fire away remap madam, thank you for your presentation last friday in new york on human rights. he boosted all of our morale. my question to you is a variable which is unknown,. >> may i ask you to get closer to the microphone. >> my question is if a conflict could take place anytime, a conflict with iran. what would that do and what impact will be on places like spain and italy and greece and most importantly, the lower developed countries. we must prepare to act in case of the crisis. >> this is clearly a risk that is of geopolitical nature with consequences of economic nature on the supply of order. if i am to sort of know my approach with an economically sound issue. and we have taken into account if and when, the price of oil and energy was to skyrocket more than it is at the moment. could take pretty much any area of the world, not that i want to minimize iran, but all such conflicts could then themselves, you know, entail economic consequences that we have to be mindful of. i don't want to sort list those parts of the world that have consequences, but this is -- you know, this is life and there is no cure for that. [laughter] >> the next question? >> madame, thank you. my question is regarding china. in relation to the global financial crisis, what policy decisions and actions would you like to see from china and the coming months? >> i think policy decisions have been announced already very much so. i will distinguish between short-term and medium-term. more public spending, some financing, but not really particularly [inaudible] i think it goes in the right direction. less monetary tightening as well and stimulus. but in the medium term, what certainly is called for by the new leaders is a model of growth that is more give and fueled by consumption. by the domestic market growth, rather than the growth of exports towards other countries. now, you will argue that this is a change that is induced by the external circumstances, bustamante addressed to china, china thinks about it and looks at it in certain markets. to actually have the degree and level of growth that is necessary to, you know, key people in place and create jobs for people. but this is a good development that certainly we welcome and we look forward to in terms of action. you know, i think that is not just a magic bullet, it is also looking into people's expectations, what kind of pension scheme will be available. how reliable is it. it takes a complex set of us who actually encouraged domestic market consumption. >> think you'd. >> since china has come up, let me ask you a related question. having nothing to do with the exchange rate. a comment that you made in your interview with the imf survey on friday. were you sad, and i quote, asia has been a fantastic partnership for the imf. now, i flagged that because it has been mention of wisdom that asia was not so happy with the imf ever since the crisis. perhaps at some point, a rivalry. i was very encouraged by that statement and i would like to ask you to elaborate. >> it would be very happy to do that. >> i think what happened a decade ago was a mixture of the distance, signal, reluctance to partner with, and i think a lot of it is fading away. i was in indonesia and poland, other asian countries. i really see that as abating. also, it has induced a little bit by circumstances. it went through a terrible time. and they are not overly concerned about you being in difficulty. i think it is fitting and proof of that, i see that in the willingness of the countries are actually contribute funding to the bilateral loans. the first country to come up with significant funds was japan. they brought in $60 billion. when i see the likes of indonesia, malaysia, it shows that they trust the institution. i hope it proves my point. you mentioned this. that is the point where sometimes you need members and an association of finances for currency in europe. for instance. but i do not see this arrangement has been in competition with the imf. to be completely frank, that is the independence of the imf. being above and beyond the bickering and the disagreements are more territorial and -- a chump card for difficult circumstances. >> i will take the kitchen for a brief word of advertising. here's the institute we're launching, which is a new series of lectures on emerging markets. you are invited to that. it will be delivered by josé gregorio, on holidays and latin america what cannot be unscathed, we would be happy for any of you to join me on that. >> on what he said about surveillance, no known the lack of progress. but at the end, he gave argentina three months more. i wanted to know what you expect and do you think that in three months they can do what they didn't do a thing for now and what will happen in december? >> thank you. you know, the quality of our analysis and the credibility that is associated with network, it relies on the brain of our analysis in our economy. but also, on the integrity of the data on which they base their calculations and all the rest of it. undetermined to make sure where we have gaps, that we try to fill in the gaps. it will continue to improve our working together. number one it is like the real food bowl. we have a choice between yellow card with a red car. sometimes it is the best. it was the yellow card, not the red card. it has to do with their determination to work cooperatively with us. but we won't work. it will be on the other side of the table. the data is not suitable, does not meet the standards, then all players are the same. >> thank you very much. >> i am from greece. >> i have seen you before in and wanted to ask you, what is this between greece? >> there are differences on the measures. they are even saying about the shortfall of $20 billion. can you tell us what is going on? >> i will be very happy to tell you what i know. but i can assure you is that our people, including we are doing everything we can to help and assist in keep us back on track. okay? i'm not finished, i will address the issue. we don't need 11.5 euros of cuts. we need a series of cuts and additional revenue. that is in order to, if you will, fill in the fiscal gap in and help the country redress its public funding situation. that is number one. number two, we need some structural form for the greek population. so that those who can work, they can actually do so. a lot of the professions in greece are still closed. a lot of the other professions -- is in terms of what needs to be done in terms of structural reforms. it should not be damaged or destroyed. fiscal gap, the structural reform, and then you have the financing. because clearly, as a result of macroeconomic situations, the major delay in privatization, and therefore shortfall from the privatization there is a finance, especially if you finance them for more time. we need to make sure that the country can be back on track. >> i would like to ask a follow up question and let me ask it. there have been lots of comments on the role that the sun has played in the three countries. in suggestions that, and i hope, some have argued that the french should, in fact, be the major financial contributor has to be the main levee or of conditionality and to have a dominant role in the view that the fund would be chief justice. on the other extreme, on some opinions, the fund should not be involved at all. and it inherently omits its abilities affect the outcomes and puts it in the worst of all worlds. the question is what lesson have you gone from the role of the fund in the three programs so far. that would perform in the future possibilities that might be a necessary. >> you know, there was a complication recently that was assessed and reviewed as part of the european program. we are operating with the european commission, that is acting on the request of the euro area and finance minister, [inaudible] i can't say how good the decision made by the european central bank two weeks ago was when it comes to stabilizing markets and expectations. and having an open door to a coordinated support. the question is really about as the imf and able to do its job. one of the people that we are playing, in doing our review and being right in the middle of controversy, which is often the case, which is often involved, we are, in fact, independent, and we are not the yes of the european partners and the european central bank. the chancellor asked me where we were on our debt sustainability analysis and i had no fear in saying yes, absolutely, those are the numbers that we stand for, and this is based on analysis -- and we should keep doing our job is rigorously and vigorously as we have. >> you've mentioned the large need for the flow of adjustment. you feel that you have prevailed on that? but maybe there was some some difference with your partners? >> or not, you're right. there have been occasions, and that was certainly the case with spain. [inaudible] we have views on the procedure, when we did the spanish article four, which was the biological surveillance,, we assessed on the basis of the numbers in the forecast of deficit consolidation that was expected come and we did say at the time, the timing seemed too short. >> i am from the peterson institute. i guess this is sort of a follow-up question. >> i see that you were taking notes to yes, you mentioned in your remarks, madam, that there should be less focus on targets rather implementable measures. with respect to greece, if we go back to march in the process back then, there was a very specific target, namely the 120 debt to gdp roll and you just mentioned this sort of deemphasizing of targets, should that be interpreted as the deaths are saying is a target in the next relevant funding prevention, and if so, does that mean that the long-term debt sustainability target is ultimately going to be achieved by the direct restructuring of the junior official sector participant, namely, the euro, maybe more opportune for the governments in question in europe, but it doesn't have to be basically settled in the month of october? >> i was clearly focusing on fiscal consolidation. we have, we have. 120% in 2020. it is still clearly what needs to be undertaken by then. on the fiscal front, clearly, we have revenues by entering into the privatization program and in due course, it has not happened. when some cuts have to be made in programs that are probably some of the most extensive. that is what i mean by sticking to the measures but not necessarily the targets at gunpoint. >> hello, my name is esther, and i am with china central committee. my question is on quotas and governance reform. governance reform is about 10% -- will the imf for more change on this in the coming week and how confident are you on how we will see the completion before the annual meetings in october as planned when i. >> clearly, there are other members, including energy from the g20 countries. it is not a u.s. issue. it focuses on u.s. because they have a very sizable quota institutions and is the largest shareholder, if you will. but the u.s. is not alone in that camp. the u.s. authorities at large, including congress will appreciate how needed u.s. leadership is and how needed the imf role is going forward in order to address, not the sort of remote crisis is processes around the world, but the indirect consequences of those crises is around the world, including u.s. economy. if there's one thing we are learning from the surveillance is the degree of interconnectedness and interdependence that is something that all the economies have amongst themselves. >> how confident are you? >> i'm desperately confident. [applause] >> if you so much. >> morris goldstein. peterson institute for economics. if you've are most interesting speech in discussing the eurozone. >> i am always interested when an english-speaking person this interesting. >> you are right. [applause] >> there was a need for growth friendly measures, not just posterity. outside of the program, what are those growth friendly measures and why should we think these will be sufficient out of recession. when discussing the u.s. fiscal cliff, he made a helpful distinction between the medium-term and when you have very adverse fiscal situations. not [inaudible] >> first one you have to look at the eurozone. you have 17 members. and the whole year, you have 27 members. two examples outside of the eurozone, and i will come back a second. another country, like sweden, sweden is traveling at .25% at the moment. definitely within the range of gdp. a country like sweden can certainly take part of that to stimulate the economy. >> on sweden, yes. >> on the other hand from your country, the policies that have been put in place so far, they focus on cutting deficits. you cannot just have a one-size-fits-all throughout the euro area. the euro area, you have situations of greece, for instance, and situation the situation of germany, which is really getting close to a neutral situation, although it still has quite a heavy debt burden on his shoulders. even within the european union and even more so in the eurozone. second, they are often growth conducive policies that can be put in place. let me think and for instance, the short-term. they're often budgetary reallocations that can certainly be used in order to stimulate the job market. you know, in order to get people training and to make sure that this by others before me, actually doesn't apply to the european workforce. that's one example. the second example has more to do with the medium and long term, which is the series of structural reform that needs to be put in place in many of the euro area's. stronger competition authority, are opening up, not only increase, but other places as well. that's what i mean by growth friendly

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