Representatives of Estonia at the IMF International Monetary and Financial Committee Meeting in Washington - Topics of Discussion

At the International Monetary and Financial Committee (IMFC) meeting of the IMF on 16 April the role of the IMF in the global economic and political environment will be discussed - Below a summary of the views of the Estonian representatives.

Besides committee work a series of important meetings are scheduled for the Estonian representatives. Inter alia, discussions will be held on the profound analysis on the efficiency of various Estonian financial supervisory authorities and their compliance with the international requirements. The analysis is being jointly prepared by the IMF and World Bank.

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Peter Lõhmus, Deputy Governor of Eesti Pank, and Tanel Ross, Head of International Department, will participate in the IMF International Monetary and Financial Committee meeting.

The main focus of this year's meeting will be on the global economic prospects and reforming the IMF's role. The Nordic Baltic Constituency, where Estonia belongs, will be represented by Sauli Niinistö, Finnish Minister of Finance. The last co-ordination of the unified views of the constituency will take place in Washington shortly before the Committee meeting. At the Committee meeting starting on 16 April one of the core topics will evidently be the role of the IMF in influencing the international economic and political environment. For Estonia it is important to answer the question how to assess the role of the IMF in Estonian economic policy of recent years and what is the attitude of Estonia to the recent criticism of the IMF.

Co-operation in economic policy with the IMF and the memoranda of economic policies play a decisive role in Estonia's development. The support and practical advice given by the IMF were of relevant importance for the success of the 1992 monetary reform and the economic reforms following it. Also, the support of the IMF given to the monetary and economic policy of Estonia in 1997 and 1998 was of utmost importance.

From time to time the IMF has been reproached for the unstable quality of its economic policy advice. At the same time one tends to forget that the full responsibility for the economic policy failures and crises lies in each country itself. The IMF is often approached if the economic policy is in a hopeless mess already. It has to be stressed that the relations between the IMF and Estonia can be characterised by the expression "political dialogue" where common understanding is achieved by negotiations rather than a dictate. This was the situation when the last memorandum of economic policies was compiled and this will be the case in the future.

Eesti Pank will definitely support the stronger than now and more focused role of the IMF in anticipating and preventing international crises. To that end the analyses of global economic situation have to become more precise and the results more transparent. Also, in co-operation with the World Bank and other organisations the IMF should pay serious attention to the stability of the financial sector.

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Besides the Committee work, the representatives of Estonia have scheduled a number of important meetings during their Washington visit, e.g., with John Odling-Smee, Director of European II Department of the IMF, Peter Keller, Head of Estonia's Mission, and several other leading experts of the IMF. A significant issue is the preparation of the IMF Mission coming to Estonia at the end of April. The IMF and World Bank are about to finish the Financial Sector Assessment Programme of Estonia (FSAP). The final report includes, inter alia, a detailed analysis of the activities and a status report of the Estonian financial sector supervisory authorities (Banking Supervision, Insurance Supervisory Authority, Securities Inspectorate). The report assesses the compliance of the activities of different Estonian financial supervisory institutions with international standards as well as the strengths and weaknesses of the Estonian financial system. The FSAP final report will evidently become the basic document in the preparations for the establishment of the unified financial supervision in Estonia.

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In addition, the Estonian delegation agenda includes meetings with T. Padoa-Schioppa, Executive Board Member of the European Central Bank, and Jürgen Stark, Deputy Governor of Deutsche Bundesbank. Economic and monetary policy issues related to the enlargement of the European Union as well as the role of central banks will be discussed here. The visit also includes meetings with analysts of the leading rating agencies.

Public Relations Department