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New IMF Managing Director Meets with Reporters - 2004-05-11

The new managing director of the International Monetary Fund (IMF), former Spanish finance minister Rodrigo Rato, met reporters for the first time in Washington Tuesday. Mr. Rato said a stronger global economy gives IMF member countries opportunities to implement growth enhancing economic reforms.

Mr. Rato was relaxed and confident addressing issues involving countries both rich and poor on four continents. He said he will begin his new job full time next month. Before that he will wrap up his affairs in Madrid and attend a meeting of world finance ministers in New York.

The 54 year-old economist, who rigorously endorsed free market policies during eight years as Spain's finance minister, does not regard prospective rises in short-term U.S. interest rates as harmful to the global economy. He is more worried about rising oil prices, but he agrees with IMF economists that global economic prospects are much improved. He said that enhanced global growth should allow the United States and Europe to implement needed policy reforms.

?We look forward for the U.S. economy to reduce its public deficit as the primary source of more stability in this economy,? he said. ?For the European Union to re-establish more dynamic growth that will allow not only more growth for its economies, but also for the contribution of the European Union to a more balanced world economy.?

Mr. Rato, a lawyer and politician with a graduate business degree from the University of California, was the consensus choice to replace Horst Koehler who resigned to be a candidate for the German presidency. By tradition the head of the 184-member IMF is a European. At his press conference, Mr. Rato said the world is a better place because of the IMF.

?Certainly the prevention of financial crises is the main objective of this institution,? he explained. ?We have certain tools for that. Surveillance [of member country economies] is one and [loan] programs is the other. I think that overall the work of this institution has been very good for the world economy and for countries in particular.?

Mr. Rato has been elected to a five-year term as IMF managing director. Significantly, he has the full support of Latin America, the Spanish-speaking region where several countries have been and are major borrowers from the IMF.