Европейский банк реконструкции и развития. Exercise 1. Read and discuss the text that follows

Exercise 1. Read and discuss the text that follows. Use the glossary given after it. Describe the facilities under which resources are made available to the IMF members. Explain the “conditionality” principle of the IMF.

The IMF’s financial resources are made available to its members under a variety of facilities and policies, depending on the circumstances, especially the nature of the macroeconomic and structural problems to be addressed.

The IMF makes resources available under both its general resources and its concessional financing facilities. Member countries use the general resources of the IMF by making a purchase (drawing) of other members’ currencies or SDRs with an equivalent amount of their own currencies. The IMF levies charges on these drawings and requires that members repurchase (repay) their own currencies from the IMF with other members’ currencies or SDRs over a specified time. Concessional financing under the structural adjustment and enhanced structural adjustment facilities is made available in the form of loans.

Regular facilities include: Reserve tranche, Credit tranches, Stand-by Arrangements, Extended Fund Facility. In providing financial support to any member country, the IMF must be assured that the member is pursuing policies that will ameliorate or eliminate its external payments problem. The requirement that members make a commitment to a set of policy measures aimed at correcting economic and financial imbalances within a reasonable period in return for IMF financial support is known as “conditionality”. “Conditionality” is designed to ensure that members using IMF resources will be able to repay the IMF in a timely manner.

IMF-supported programmes emphasize certain key aggregate economic variables, including domestic credit, the public sector deficit, international reserves, and external debt. They also emphasize crucial elements of the pricing system – including the exchange rate, interest rate, and, in some cases, commodity prices – that significantly affect the country’s public finances and foreign trade.

A successful adjustment programme must elicit an adequate response from the supply side of the economy. Interest rates and exchange rates are particularly important, since they influence savings and investment decisions and, therefore, a member country’s growth prospects.

Adjustment programmes, typically, have an impact on income distribution, employment and social services. While the promotion of sound macroeconomic policies and structural reforms contributes to sustained growth and employment, adjustment may also involve short-term social costs to vulnerable groups. The IMF staff analyse the implications of reform measures for vulnerable groups and advise the authorities on how best to integrate social safety nets and their financing into programmes.

VOCABULARY

 

Facility                                              (зд.) схема кредитования, механизм финансирования

To address                                         обращаться (к чему-л.)

Concessional financing facilit           yмеханизм льготного финансирования

Regular facilities                               обычные механизмы финансирования

Reserve tranche                                 резервный транш

To ameliorate                                     улучшать

External payments problem               проблема внешних платежей

“Conditionality”                                (зд.) обусловленность кредитов МВФ)

Timely                                               своевременный

Aggregate economic variables          совокупные экономические переменные (величины)

Crucial                                               решающий

To elicit                                             извлекать, выявлять

Sound policy                                     разумная политика

Vulnerable                                         уязвимый

Implication                                        смысл, значение (событий)

 

Exercise 2. Answer the following questions.

 

1. What is the international monetary system?

2. When did the system emerge?

3. What institutions does it comprise?

4. What international reserve asset has been created by the IMF? How is the SDR value determined?

5. Under what financing facilities does the IMF offer resources to its members?

6. What is “conditionality” designed to ensure?

7. Is Russia (other former republics of the URSS) an IMF’s member?

8. What organizations help to reschedule debts?

Exercise 3. Fill in the gaps with the words and expressions from the text:

 

1. The IMF’s financial resources are made ___________________ to its members under a variety of____________________________, depending on the circumstances, especially the nature of the ____________________________________ to be addressed.

 

2. The IMF makes ________________________ available under both its general resources and its _____________________________________.

 

3. Member countries use ______________________________________by making a purchase (drawing) of other members’ currencies or SDRs with an equivalent amount of ______________________________________.

 

4. Regular facilities include: Reserve tranche, _____________________, ________________, _____________________________.

 

5. In providing financial support to any member country, the IMF must be assured that ______________________________________that will ameliorate or _______________ its external payments problem.

 

6. The requirement that members make _____________________ to a set of policy measures aimed at correcting economic and financial __________________ within a reasonable period in return for IMF financial support is known as “__________________”.

7. IMF-supported programmes emphasize certain key ____________________, including ______________________, ________________________, international reserves, and external debt.

 

8. A successful adjustment programme must __________________an adequate response from the _____________________________________.

 

9. Interest rates and exchange rates are particularly_________________, since they influence savings and investment decisions and, therefore, a member country’s ______________________________.

 

10. The IMF staff analyse the __________________________of reform measures for vulnerable groups and advise the authorities on how _______________________ and their financing into programmes.

 

Exercise 4. Translate the words and expressions below from Russian into English and make up your own sentences with them.

 

1. разумная политика

__________________________________________________________________________

2. решающий

__________________________________________________________________________

3. своевременный

__________________________________________________________________________

4. обусловленность кредитов (МВФ)

__________________________________________________________________________

5. совокупные экономические переменные (величины)

__________________________________________________________________________

6. проблема внешних платежей

__________________________________________________________________________

7. резервный транш

__________________________________________________________________________

8. обычные механизмы финансирования

__________________________________________________________________________

9. схема кредитования, механизм финансирования

__________________________________________________________________________

10. механизм льготного финансирования

__________________________________________________________________________

 

Exercise 5. Translate the words and expressions below from English into Russian and make up your own sentences with them.

1. to address

__________________________________________________________________________

2. to ameliorate

__________________________________________________________________________

3. vulnerable

__________________________________________________________________________

4. implication

__________________________________________________________________________

 

5. to elicit

__________________________________________________________________________

6. financial resources

__________________________________________________________________________

7. concessional financing facilities

__________________________________________________________________________

8. to levy charges

__________________________________________________________________________

9. over a specified time

__________________________________________________________________________

10. to emphasize

__________________________________________________________________________

11. in a timely manner

__________________________________________________________________________

12. crucial elements of the pricing system

__________________________________________________________________________

13. a successful adjustment program

__________________________________________________________________________

14. to have an impact on income distribution

__________________________________________________________________________

 

Exercise 6. Find in the text (of exercise 1) English equivalents for the following Russian phrases:

 

1. различные механизмы кредитования

__________________________________________________________________________

2. с помощью механизма льготного финансирования

__________________________________________________________________________

3. обычные механизмы финансирования включают в себя резервный транш, кредитный транш и т.д.

_______________________________________________________________________________

_______________________________________________________________________________

4. улучшать проблему внешних платежей

__________________________________________________________________________

5. программы, поддерживаемые МВФ

__________________________________________________________________________

6. ключевые совокупные экономические переменные

__________________________________________________________________________

7. проводить разумную политику

__________________________________________________________________________

8. влиять на распределение дохода

__________________________________________________________________________

9. значение реформ

__________________________________________________________________________

 

Exercise 7. Single out the main points of the text (ex. 1). Use the following opening phrases:

1. The text looks at (the problem of …) …;

_____________________________________________________________________

2. The text deals with the issue of …;

_____________________________________________________________________

3. It is clear from the text that …;

_____________________________________________________________________

4. Among other things the text raises the issue of …;

_____________________________________________________________________

5. The problem of … is of great importance.

_____________________________________________________________________

6. One of the main points to be singled out is …;

_____________________________________________________________________

7. Great importance is also attached to …;

_____________________________________________________________________

8. In this connection, I’d like to say …;

_____________________________________________________________________

9. It further says that … ;

_____________________________________________________________________

10. I find the question of … very important because …;

_____________________________________________________________________

11. We shouldn’t forget that … ;

_____________________________________________________________________

12. I think that … should be mentioned here as a very important mechanism of … .

_____________________________________________________________________

 

Exercise 8. Match the verbs from (a) with the nouns from (b) below:

 

a) to make                  b) a response

to levy                                decisions

to ameliorate          an impact

to emphasize           costs

to affect                  the implications

to elicit                    a purchase

to influence             charges

to have                    the problem

to involve                economic variables

to analyze                   public finances

 

Exercise 9. Think of and write the verbs that are most commonly used with:

 

1. response

__________________________________________________________________________

2. the problem

__________________________________________________________________________

3. finances

__________________________________________________________________________

4. costs

__________________________________________________________________________

5. a purchase

__________________________________________________________________________

6. tranche

__________________________________________________________________________

7. facility

__________________________________________________________________________

8. an impact

__________________________________________________________________________

9. reform

__________________________________________________________________________

10. interest rates

__________________________________________________________________________

 

Exercise 10. Read the text, supplying the prepositions where necessary. Describe the purposes for which the organization was set up.

The EBRD (European Bank for Reconstruction and Development) is a multinational institution set … with the specific aim of assisting the countries of Central and Eastern Europe to develop into market-oriented economies. Its 59 shareholders include countries from both this region and the rest … the world, plus the European Community and the European Investment Bank.

The strongest comparative advantage of the Bank relative to other international financial institutions lies in its ability to operate both in the public and private sectors and to have … its disposal the broadest range and flexibility of financing instruments. The Bank is uniquely equipped in both staff and range of instruments to support the different stages of transition.

Specifically, the EBRD seeks to promote the development of the private sector within these economies … its investment operation and through the mobilization of foreign and domestic capital. In relation to private commercial banks, the EBRD’s main advantage lies in its willingness and ability to bear risk. This allows the Bank to act at the frontier of commercial possibilities. It also shares the project risk … acting with other private sector entities, such as commercial banks and investment funds, as well as multilateral lenders and national export credit agencies.

While its structure is unlike that of commercial bank, the EBRD has a similar approach … dealing with projects and it prices its products … a commercial basis. With its AAA credit rating, the Bank is able to raise funds … the finest rates from the international capital markets.

For a project to be considered it has to be commercially viable. The Bank does not issue guarantees … export credits or provide retail banking services.

Foreign joint ventures are one of the EBRD’s main vehicles for financing; joint ventures offer partners an effective way to gain access … foreign and domestic markets, encourage foreign private investments in the region, reduce risk, and facilitate the transfer … technology and management skills.

 

VOCABULARY

Shareholder                           акционер

Relative to                             относительно

Flexibility                              гибкость

Specifically                            конкретно

In relation to                          что касается

Willingness                            готовность

To bear risk                            нести риск

Multilateral lenders                многосторонние кредиторы

AAA credit rating                 показатель кредитоспособности ААА

Viable                                    жизнеспособный

 

Exercise 11. Translate the dialogue, using the vocabulary, given after it. Sum up its content and act it out.

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