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Readout of President Biden’s Call with President Vladimir Putin of Russia
FEBRUARY 12, 2022


President Joseph R. Biden, Jr. spoke today with President Vladimir Putin of Russia about Russia’s escalating military buildup on the borders of Ukraine. President Biden was clear that, if Russia undertakes a further invasion of Ukraine, the United States together with our Allies and partners will respond decisively and impose swift and severe costs on Russia. President Biden reiterated that a further Russian invasion of Ukraine would produce widespread human suffering and diminish Russia’s standing. President Biden was clear with President Putin that while the United States remains prepared to engage in diplomacy, in full coordination with our Allies and partners, we are equally prepared for other scenarios.

Background Press Call by a Senior Administration Official on the President’s Call with Russian President Vladimir Putin

FEBRUARY 12, 2022


Via Teleconference

12:53 P.M. EST

MODERATOR: Thanks, everyone, for joining us today. Today’s call will be on background, attributed to a “senior administration official.” And contents will be embargoed until the conclusion of the call.

Today’s speaker will be [senior administration official], who will have some comments at the top and then take a few questions.

Over to you.

SENIOR ADMINISTRATION OFFICIAL: Thanks. And thanks, everybody, for taking the time.

So, the call between the two presidents was professional and substantive. It lasted a bit over an hour. There was no fundamental change in the dynamic that has been unfolding now for several weeks, but we believe that we have put ideas on the table that would be in our and our allies’ interest to pursue, that would enhance European security, and that would also address some of Russia’s stated concerns, just as we have been clear that we are committed to upholding Ukraine’s sovereignty, territorial integrity, and the rights of states to choose their own security arrangements.

But it remains unclear whether Russia is interested in pursuing its goals diplomatically as opposed to through the use of force.

We remain committed to keeping the prospect of de-escalation through diplomacy alive. But we are also clear-eyed about the prospects of that, given the readily apparent steps Russia is taking on the ground in plain sight, right before our eyes. Stakes — the stakes of this are too high not to give Russia every chance to avoid an action that we believe would be catastrophic.

So, as always, we continue along two paths: diplomacy, including maintaining close alignment with our partners and allies, as evidenced by the President’s repeated bilateral engagements, including with President Zelenskyy, his call yesterday with key allies, and today’s call with President Putin, as well as other senior officials’ calls with their counterparts in all of these same categories.

Meanwhile, we are intensifying our efforts to deter Russia and to impose costs should it decide to go ahead with military action anyway.

You will have seen the announcement yesterday of an additional 3,000 U.S. forces headed to Poland. Our deliveries of security assistance to Ukraine have continued in recent days, and our discussions with the EU, UK, Canadian, and other partners and Allies to ensure that we are prepared to immediately impose severe financial sanctions and export controls are also reaching a culmination point.

We are continuing to reduce our diplomatic presence in Kyiv, as you’ve seen, and the President was very direct with President Putin about our concern for the safety and security of Americans still in Ukraine.

Whatever Russia decides, our assessment is that their efforts to improve their strategic position are already failing and that this will only be exacerbated should they decide to take military action.

The transatlantic relationship is more closely aligned than it has been in quite some time. NATO is stronger and more purposeful. Russia is already finding itself increasingly isolated from the wider world and more dependent on China, having together revealed a fundamentally different worldview at odds with the principled, affirmative, international law-abiding worldview and values that we stand for.

And Russia is finding itself on defense in the information space, given our own transparency about its intention.

Over time, if Russia invades, this list will also include a severe economic cost that I’ve already described and irrevocable reputational damage caused by taking innocent lives for a bloody war choice.

The two presidents agreed that our teams will stay engaged in the days ahead. Russia may decide to proceed with military action anyway. Indeed, that is a distinct possibility.

If it does, the damage to Ukraine, to European security, and, yes, to Russia will be profound. That is an outcome President Biden believes we should continue to work hard to avert.

Thank you.

MODERATOR: Thanks. Operator, we’re ready for questions now.

Q Thank you so much for doing the call. Could you talk a little bit about, you know, anything that President Biden brought to the table today in terms of proposals, as far as an off-ramp that he thinks can get us to de-escalation? And then, could you also talk a little bit about if you had any signs that an operation was more imminent than thought before? Thank you.

SENIOR ADMINISTRATION OFFICIAL: Thanks, Trevor. So, look, our view is that we have brought serious, substantive ideas to the diplomatic table for a period of weeks now. Many of those ideas are in the public domain already. We have offered those directly to the Russians in diplomatic discussions. We have developed them in close consultation with our partners and Allies. And President Biden continued to take that approach in the call with President Putin.

We have also been very clear that our strong preference is not to negotiate in public because we don’t believe that that is the best way to find a path to de-escalation, which is our main priority for these diplomatic conversations.

So, I am not going to get into very many of the details of this portion of the conversation, but I would say the President continued down the path that we have been on for quite some time, which is a mode of problem solving and finding solutions that are in our interest, the interest of our partners and Allies, and that can address at least some of the concerns that Russia has raised.

Q Hi, thank you for doing this, [senior administration official]. Two questions. You said that an attack was a “distinct possibility.” The tone of the briefing yesterday was that the attack was imminent and the decision had been taken. Can you elaborate on that?

And then, in terms of continuing to provide Ukraine with military equipment, would that continue after a military attack by Russia, and might the nature of that support change? I’m thinking of things like anti-aircraft weapons and so on.

SENIOR ADMINISTRATION OFFICIAL: So, I guess I’d say two things: I would direct you to comments that my colleague, Jake Sullivan, made on this notion of whether President Putin has made a decision. You know, I think the honest answer to that question is we don’t have full visibility into President Putin’s decision making. You’d have to direct that question to the Kremlin or to President Putin himself.

But, you know, we are not basing our assessment of this on what the Russians say publicly. We are basing this assessment on what we are seeing on the ground with our own eyes, which is a continued Russian build-up on the border with Ukraine and no meaningful evidence of de-escalation or, really, of any interest in de-escalation. So, our sense is that the trends that we’ve been seeing and talking about for many weeks now are continuing. And, you know, beyond that, I don’t think we have any real insights to offer.

As to our plans going forward, I think President Biden and other officials have been clear that should Russia continue down the path to escalation, the United States will continue to increase our support to Ukraine to enable it to defend itself. And, you know, that approach has not changed.

Q Hi. Thanks. So, I’m wondering if you can talk a little bit about whether or not the alleged false-flag plans were discussed in the call, and what — if so, if you can characterize Putin’s response at all.

And also, there were reports of a sort of close encounter between Russian and American submarines today, and I’m wondering if they discussed that as well. Thanks.

SENIOR ADMINISTRATION OFFICIAL: So, on your first point, I mean, I think, as a general matter, you can conclude that the issues that we raised concerns about publicly are raised privately between the two presidents. They have conversations that are quite direct, I would say, on both sides. And so, if there’s an issue that we have been bringing to your attention through briefings and in other fora, you can conclude that the presidents have widely discussed that as well.

But beyond that, I don’t want to get into the specifics of what we raised, and certainly not — I certainly don’t go — we don’t go down the road of characterizing President Putin’s response. That’s just not something we tend to do with the other sides of these conversations in these readouts.

On this close encounter, I would really direct you to the Pentagon for that. You know, I don’t have any information to provide about that on this call.

MODERATOR: All right, thanks, everyone. We have to wrap now. With the conclusion of the call, the embargo is lifted.

A friendly reminder, we’re on background, attributed to a “senior administration official.” Thanks all.

SENIOR ADMINISTRATION OFFICIAL: Thank you.

1:03 P.M. EST

IMF interesting latest news

Dear maria, We just published a new blog—please find the full text below. Europe’s Consumers are Sitting on 1 Trillion Euros in Pandemic Savings (Photo: IMF photo/Cyril Marchilhacy) By Thomas McGregor, Nujin Suphaphiphat and Frederik Toscani In ordinary times, Europeans save around 12 percent of their income. But as families stayed at home and furlough schemes supported income during the pandemic, this savings rate increased sharply to almost 19 percent in 2020 and 2021. As shown in this Chart of the Week, we estimate that households in the euro area saved nearly 1 trillion euros more in those two years than they would have done if the pandemic never happened. In other words, people saved a record sum—equivalent to around 8 percent of total euro-area gross domestic product. Euro-area economic growth and potentially inflation would get a big boost if consumers were to spend part of their excess savings by temporarily reducing the rate at which they save to below that seen prior to the pandemic. This would be consistent with the pattern after some previous pandemics and severe economic shocks, when households saved a much smaller proportion of their income than they had done historically. Even a moderate increase in spending—if households were to use about one-third of their excess savings for higher consumption over two years, say—would add 2.5 percentage points to GDP and up to 0.75 percentage point to inflation by the end of the second year. Some unwinding but no spending spree Half of the euro area’s excess savings are in bank accounts, meaning they could, in principle, be easily accessed and spent once pandemic restrictions are lifted. And most of the savings were forced, not precautionary as is more common during recessions when people worry about future income, suggesting that they may be spent soon. Yet there are four reasons these savings may not be released into the real economy in a hurry. First, the sort of expenditure that households were forced to forgo during the pandemic is not easily replaced. Almost 80 percent of the total spending drop in 2020 stemmed from declines in hospitality and transport. Consumers are unlikely to ever make up for all the cancelled airline flights, hotel stays or restaurant meals. Second, excess savings mostly accrued to those with high incomes. In France, for example, the richest 10 percent of households increased savings substantially even as some poorer families reduced savings, bank data show. High-earners typically save a larger share of their income and so are less likely to spend their savings. Third, supply chain problems mean many may struggle to spend their savings—even if they wish to. Long delivery times and higher prices are making it harder for consumers to substitute what they would ordinarily have spent on services with increased spending on goods (though this pent-up demand could boost consumption of goods in the future). And fourth, the spread of the Omicron variant means Europeans may be forced to save for a little longer. Uncertainty surrounding the outlook for consumption remains exceptionally high. Policymakers should keep a close watch on savings rates as they assess the strength of the recovery—and, if necessary, adjust monetary and fiscal policy to ensure sustained and equitable growth and to preserve price stability. ******

Jeff Kearns Managing Editor IMF Blog jkearns@IMF.org   Thank you again for your interest in IMF Blog. Read more of our latest content here. Take good care!

For too long, many countries have ignored asset valuation and management.

Dear maria, Welcome to the Weekend Read! In today's edition we explore, among other things, the challenges facing the euro area economy, central bank digital currencies, the difficulties firms face hiring workers, and how the pandemic exposed weaknesses in the social contract and what can be done to build a more inclusive future.  Euro Area (Photo: kontrast-fotodesign/iStock by Getty Images) Europe's Economy is Recovering Economic policies in the euro area have supported household incomes and protected corporate balance sheets, while high levels of vaccination and increasing adaptation to the pandemic have also helped to foster a strong economic recovery, the IMF’s Europe Department says in a new Country Focus article. Drawing on a staff report released on Monday, the authors say that the challenge is to coordinate the normalization of economic policy in the face of elevated uncertainty, including the evolution and legacies of the pandemic, as well as ongoing geopolitical tensions. --Inflation Risks: Under the baseline, medium-term inflation dynamics are expected to remain weak. But upside inflation risks have clearly increased, and the European Central Bank should stand ready to adjust course as needed. Some euro area countries could tighten their macroprudential stance given stretched asset valuations, especially in real estate markets. --Labor Recovery: The labor market recovered rapidly but unevenly across sectors. Policies need to facilitate labor reallocation and protect the vulnerable, which includes reskilling and upskilling workers, using hiring subsidies, and enhancing targeted safety nets.  Watch the Director of the IMF's European Department, Alfred Kammer, update the European Parliament on the outlook, and download the presentation here.   Digital Currencies (Photo: Justhavealook/iStock by Getty Images) Central Bank Digital Currencies Around the world, central banks are pondering whether to issue their own digital currencies to the public. A new IMF Fintech Note shares insights, lessons and questions from six countries at the CBDC frontier, from China to Sweden. Speaking at the launch of the note on Wednesday, IMF Managing Director Kristalina Georgieva said that central banks have moved beyond the conceptual stage and were now experimenting with digital currencies. “Central banks are rolling up their sleeves and familiarizing themselves with the bits and bytes of digital money,” she said in opening remarks to the event, hosted by the Atlantic Council. Around 100 countries are exploring CBDCs in one way or another. In the Bahamas, the Sand Dollar has been in circulation for over a year. And in China, more than a hundred million people use the digital renminbi. --Common Lessons: Kristalina said there were three common lessons: there is no universal case for CBDCs because each economy is different; financial stability and privacy considerations are paramount to the design of CBDCs; and introducing a CBDC is about finding a balance between developments on the design front and on the policy front.  Watch a video of the event, also featuring Tobias Adrian, Director of the IMF’s Monetary and Capital Markets Department, and find all the IMF’s Fintech Notes along with blogs, videos and other related content here. F&D (Image: Porter Gifford) People in Economics Ever since she produced a report on elephants in the first grade, Amy Finkelstein knew she would be a scholar like her parents. But it wasn’t until her senior year at Harvard College that she chose economics. Majoring in political science, she decided to take a course in applied microeconomics. “That was a totally transformative experience for me,” Finkelstein says. “It opened my eyes to the idea that one could use data to inform what had otherwise seemed like ideological debates.” In the years since, Finkelstein, who now teaches at the Massachusetts Institute of Technology (MIT), has established herself among the country’s preeminent health economists. Her work ranges from estimating the welfare benefits of alternative social insurance programs to the effectiveness of mammogram screening. The common thread: using large data sets to test economic models—and arriving at conclusions that often challenge conventional wisdom. Read the entire article.   Coming Soon: F&D March Issue "Rethinking Fiscal" Our upcoming issue of Finance & Development will focus on how the pandemic has forced a rethink of fiscal policy. Fresh insights and analysis from Vitor Gaspar, Olivier Blanchard, Ceyla Pazarbasioglu, Carmen Reinhart, Arminio Fraga, Ricardo Reis, Emmanuel Saez, Felipe Larraín, and more will delve into issues of spending, debt and the role of government in economic life. The issue will also explore how some countries are innovating in areas of climate, transparency, and digitalization; the role of taxation; and how fiscal policy can be used to curb inequalities.  Take a look back at our December Issue of Finance & Development.  Want to get a print copy delivered to your home or office? Click here to subscribe.   (Photo: RichLegg/iStock)   Labor Puzzle As economies recover from the pandemic, why are companies having such a hard time hiring workers? In a new podcast, journalist Rhoda Metcalfe asks economists Carlo Pizzinelli and Ippei Shibata what's behind the labor shortage in many advanced economies. (Photo: IMF)   Social Contract COVID-19 has led to a crisis like no other and highlighted weaknesses in the current social contract. IMF Director Kristalina Georgieva joined the LSE's Baroness Minouche Shafik for a live conversation moderated by CNN’s Eleni Giokos to discuss options for a more inclusive future. (Photo: Cory Hancock/IMF)   Essential Reading: COVID-19 The pandemic is continuing to disrupt the global economy. Check out our eLibrary section on issues related to COVID-19. You can find IMF research on everything from vaccines to remittances to how the pandemic is affecting the economic outlook at both a global and regional level. Quote of the Week "The history of money is entering a new chapter." —The IMF's Kristalina Georgieva speaking about central bank digital currencies at the Atlantic Council on Wednesday. WEEKLY ROUND-UP 01. Inclusive Growth Rising inequality and widespread poverty, social unrest and polarization, gender and ethnic disparities, declining social mobility, economic fragility, unbalanced growth due to technology and globalization, and existential danger from climate change are urgent global concerns. On Thursday IMF Director Kristalina Georgieva and Valerie Cerra, Assistant Director of the IMF's Fiscal Affairs Department, spoke at the Center for Global Development at the launch of a new book, How to Achieve Inclusive Growth, co-published by the IMF and Oxford University Press. Watch a video of the event here. 02. Taxes and Gender Taxes can impact men and women differently. A recent IMF staff paper provides an overview of the relation between tax policy and gender equality, covering labor, capital and wealth, as well as consumption taxes. The analysis by the IMF's Maria Delgado Coelho, Aieshwarya Davis, Alexander D. Klemm, and Carolina Osorio Buitron finds that explicitly neutral tax policy can have first-order effects on important dimensions of inequality and that gender impact should be part of policy design. 03. Latin America A recent IMF staff paper from Santiago Acosta-Ormaechea, Samuel Pienknagura, and Carlo Pizzinelli provides an overview of taxes in Latin America and the Caribbean before the pandemic, compares them with OECD countries, and recommends tax reforms to encourage strong and inclusive growth. Read a related Country Focus article on how taxes can support growth and reduce inequality in the region. 04. Supporting Financial Resilience The IMF's Monetary & Capital Markets Department released its Capacity Development Strategy 2022-25 on "Supporting Financial Resilience Through Disruption & Change.” It outlines the IMF's approach to capacity development in support of global financial & monetary stability, from digital currency and crypto assets to cyber risks and debt management. Read here. As Europe's families stayed at home and furlough schemes supported income during the pandemic, savings rates increased sharply. As shown in this Chart of the Week by Thomas McGregor, Nujin Suphaphiphat and Frederik Toscani, households in the euro area saved nearly one trillion euros more in 2020 and 2021 than they would have done if the pandemic never happened. Euro-area economic growth and potentially inflation would get a big boost if consumers were to spend part of their excess savings. Yet there are four reasons these savings may not be released into the real economy in a hurry, the authors say. Adam Behsudi Editor IMF Weekend Read abehsudi@IMF.org   P.S. Be sure to let us know what issues and trends we should have on our radar.