Transcript

Transcript of IMF Press Briefing

March 23, 2017

MR. RICE: Good morning, everyone. And welcome to this press briefing on behalf of the International Monetary Fund. I am Gerry Rice of the Communications Department.

And as usual, this morning our briefing will be embargoed until 9:30 a.m., that’s Washington time. I'm going to make a few announcements and then get to your questions in the room. Take a couple online as well.

So, beginning with events, I can tell you that tomorrow, March 24, at 9:30 a.m., our Managing Director, Christine Lagarde, will give the opening remarks at a conference on Gender and Macroeconomics, being held here at the Fund. You are welcome to attend.

And then on April 3^rd, Madame Lagarde will speak at the American Enterprise Institute here in Washington. And interestingly, I think presenting a new study from IMF staff on the issue of productivity growth, big issue. And as I say, she will be -- we'll be releasing that report that day, and Christine Lagarde will be at the American Enterprise Institute, and it starts at 11:00 o'clock, April 3^rd.

On April 5 to 7, our First Deputy Managing Director, David Lipton, will be in Argentina. And he'll be attending the World Economic Forum’s, Latin America Summit, in Buenos Aires. Our director for the Western Hemisphere Department, Alejandro Werner, will also be there.

Also, around that time, April 6 and 7, our Deputy Managing Director, Mitsuhiro Furusawa, will be in the Philippines attending the ASEAN+3, Finance Ministers and Central Bank Governors Meeting.

And then -- I'll keep this short -- but as you know around April 6, we head into the Spring Meetings Agenda, and we can give you much more detail on that, as you wish. But that will be the time of the next -- my next briefing here. And we will be releasing various analytical chapters of the Global Financial Stability Report, the World Economic Outlook, and those of you who follow the Fund are very familiar with that. So, around April 6, we'll be heading into that.

Just one date, just throw out one date for you, April 12^th, the Managing Director will be giving what we call here, our Curtain Raiser Speech for the Spring Meetings, and she's going to be doing that this year in Brussels. In fact, at the Bruegel Institute; you know, we try and move this thing around the world. But she will be essentially, at that point, April 12^th, laying out how we see the main issues for the Spring Meetings, so that’s something to look out for.

With that, let me turn to your questions in the room. Good morning.

QUESTIONER: Good morning. Good morning, Gerry. Thanks for doing this, as always. And I just wanted to try to find out. Can you tell us what happened with the review for Ukraine that was scheduled for Monday and was postponed at the last moment? Why was the decision taken -- and why so late on that?

MR. RICE: Yes. You are quite right. As we said a few days ago, the meeting that had been scheduled on Ukraine on the third review of our lending arrangement with Ukraine, that has been postponed, and that’s to allow our staff time to assess implications of various recent developments for the program. I don't have a lot more for you on that, except to say, you know, constructive discussions between staff and Ukrainian authorities have been continuing.

Again, taking into account, you know, some recent developments. I characterize those discussions as constructive, and I'd also say that we expect to announce a new Board date soon. And you know, because you follow the Fund so closely, but others may not. This isn't unusual. Okay. That we have a postponement of a Board date, it happens -- it's not unusual.

So, I wouldn’t read too much into it. And I think it's only natural in cases where, you know, we have developments that we step back to assess. Yes.

QUESTIONER: When you talk about developments everybody assumes, in Ukraine at least, that it has to do with the blockade of the Donbass region in that country. Is that assumption correct?

MR. RICE: As I said, I don't have a lot more for you beyond what I've said. I don't have the details of the developments; our staff is discussing all of that with the authorities. And again, it's very constructive, the discussions we've had in recent days. And I expect, we expect, to be able to announce a Board date soon.

QUESTIONER: The decision was announced when the MD and the First Deputy MD were in Baden-Baden in Germany.

MR. RICE: Yeah.

QUESTIONER: Does this mean that the decision was not cleared with them, or did they clear it in Germany?

MR. RICE: Now, you know the way the IMF works, so --

QUESTIONER: Well, I want you to say this.

MR. RICE: All right. Then I'll say it, that of course our management is fully informed, and more than that, is making the decisions on these things. So, yes --

QUESTIONER: They made the decisions in Germany, and relayed them here. Is that correct?

MR. RICE: Well, I wouldn’t overly complicate it. I mean, the way that the Fund works is that staff and management work closely together, and management of course always approves such decisions, and that was, indeed, the case here. We have a --

QUESTIONER: One last thing. One very last --

MR. RICE: Okay. It's just we have a colleague from Ukraine as well.

QUESTIONER: Yes. One very last thing; when the Ukrainian government held their own emergency meetings because of the decision, the Ukrainian president made a joke, or at least he said that somebody made a joke to him, that they needed to send to the IMF some well-known radicals, radical nationalists from Ukraine to conduct negotiations with the IMF. I think it implied some sort of threat to the IMF, physical threat. Do you find the joke funny?

MR. RICE: You know, I haven't -- I'm not familiar with that at all. So, I don’t really have anything on that. Are we on Ukraine?

QUESTIONER: Yes.

MR. RICE: Okay. Welcome.

QUESTIONER: Thank you for your answer about Ukraine. But can I ask you to clarify? Is the IMF considering new conditions of the disbursement, I mean terms and demand?

MR. RICE: I am not aware of us seeking new conditions. As I said, you know, there have been developments in Ukraine; we are discussing those developments with the authorities in a constructive way, and we expect to be able to announce a new date for the Board meeting soon. So again, as I mentioned, this is not unusual that a Board date moves around a little bit, so I hope that’s helpful. Good morning.

Questioner: Good morning, Gerry. I have a question on Greece and the Greek program. It was reported or actually, the European officials said that the IMF is seeking assurances from the Greek opposition for the measures in order to consider re-entering the Greek program. I understand you had something out that was actually denying that, but can you please explain your rationale in what you would expect what you would like to see Greece given -- as regarding the support of the program, given that this program is considering measures, you know, for a long period of time --

Questioner: -- up to 2019, 2020. Thank you.

MR. RICE: Okay, I’m not sure I have a great deal for you on that, but maybe clarifying if I can. You know strong ownership of -- of a program is, without doubt, essential to its effectiveness, to its success and, you know, the government in Greece, it’s true for all our programs actually, is encouraged to build that strong support around the -- around the program. What I can do now is reconfirm that we have not had contact with opposition parties. As we have said previously, so I’m just reconfirming that for you. How else can I help you?

Questioner: Well, we know in the past that the opposition has been required to sign letter of agreement or understanding that the measures of previous government, of the current government will -- will --

MR. RICE: Yeah.

Questioner: -- be effective --

MR. RICE: Yeah.

Questioner: -- for another possible government. Is that something we might expect in this case as well?

MR. RICE: Yeah, that’s -- what you said is true and it’s true also, again, not just in Greece, but in other programs, but I think it really depends on when we get to the stage ofbeginning to agree that we would be moving forward with a program, and we’re not there yet, clearly. In fact, maybe I’ll just give you the status, because I see a few other Greek colleagues in the room, that the discussions are continuing in Brussels between the authorities and the institutions. The IMF is there and looking at some of the key policy issues, in particular, pension and labor market reforms. And what I can tell you is that progress is being made, but more work will be needed to narrow remaining differences, so those discussions are live. They are ongoing now. I don’t have the detailed agenda for you, but that’s the status. Yes.

Questioner: Thank you. Is there any chance that the second review can be completed without the Fund’s agreement, I mean, the same way that happened with the first -- the first review?

MR. RICE: You know, that’s a question really, I think for the European partners, to ask them, but what they have said until now, as you know, is that they would like and would -- to have the IMF involved and more than that, the Greek authorities have also indicated that they would like to have the IMF involved, so we’re engaged, we’re discussing, and we’re trying to, along with our partners and with the Greek authorities, move this as quickly as we can. Okay, -- why don’t I take her and him, so that I can bundle this up and we can move on given the shortage of time.

Questioner: Given the Greek economic situation with Secretary Mnuchin when they might -- weeks ago, and do you think the new administration has a different approach to the Greek issue?

MR. RICE: Yes, as I’ve said, before here, you know, I’m not aware of -- of any change in view of the -- of the U.S. Administration, but it’s really again, something that you should -- that you should put to them. The discussion with Secretary Mnuchin, as I said, at the time, I think covered a wide range of topics. I believe that Greece was one of those topics, so this is a conversation that took place now, several weeks ago, but yes, I think --

MR. RICE: Yes, in their meeting, I believe that, you know, they covered a wide range of topics, including -- including Greece. Again, it was a number of weeks ago now. What else? Let’s take one more on Greece from him, and then we move on up.

Questioner: What they are accusing you of - not you personally, of course, the IMF --

MR. RICE: Thank you.

Questioner: -- is that -- they say that the question is if you really want to stay on this program, and they say this is the case, actually, if you decide to stay or go, and also they, say according to the report, that the finance minister of Greece exchanged harsh words with the head of the mission recently in Athens. And he’s accusing IMF that it’s stopping the the completion of the review. So do you see any possibility for the IMF to stay on this problem?

MR. RICE: You know, I said it before, so maybe just repeating here, we’re working with all the partners as hard as we can toward reaching an agreement. We are fully engaged and trying to be as helpful as we can. And I’ve just characterized the discussions in Brussels as, you know, we think there’s progress being made. But at the same time, there’s more work needed to be done to narrow the remaining differences, so I’m not going to speculate on timing or set unrealistic expectations - that’s not helpful. But we are working as hard as we can, as I just said. Can we move on from Greece, please? Let me move on from Greece. Yeah?

MR. RICE: So you’re not going to ask about Greece?

Questioner: No, no, not at all.

MR. RICE: Thank you.

Questioner: We’re trying to get out of a very, very deep recession, and we are discussing pension reform, and we already excluded the militaries from the reform, the congressmen from the reform, and this week we also excluded the public servants in the states of our pension reform. So maybe our government will be forced to raise taxes. So I wonder if the IMF would comment on that. What happened with those that are already in this very difficult challenge of discussing perks in their spending, but can be forced in the future to discuss all these reforms again?

MR. RICE: Yeah, I don’t really have anything on this new these new measures that have been discussed in recent days, so it’s something we’ll look at, I think once we have the full details and some time to look at it. Sorry about that.

Questioner: Hi. I think Tunisia’s finance minister, either yesterday or today, indicated that they’re optimistic that they might receive the next tranche in their program next month. Do you have any update on that?

MR. RICE: Yes, on Tunisia, what I can tell you is that the discussions on completing the first review are still ongoing. I can tell you an IMF staff team was in Tunis in February and was assessing and discussing with the authorities. So that’s kind of where we are, the discussions are ongoing, and we are trying, again, to move as fast as we can in support of the government’s program. So I don’t have timing for you on that.

QUESTIONER: As a follow up, does the Fund have a position on the G-20 communique that came out last week? There was a shift in the language on --

MR. RICE: Yeah.

QUESTIONER: -- trade. A bit of less commitment to avoiding protectionism. What’s the Fund’s view on that?

MR. RICE: We did have a view on that, and actually we released a statement in the name of our Managing Director that gave our view on the G-20 meeting, which you know, we thought it was a constructive meeting.

On your your specific question on trade and so, and I know there’s a lot of ex-post discussion of that. Number one, the IMF’s view on trade, I think we’ve talked about it here many times, even in recent days. But we believe trade has been a major engine of global growth and prosperity, and that the objective of the open trade conducted under fair rules and well-enforced is a shared objective.

At the same time, there’s been a lot of discussion here at the IMF and in other forums, and in the G-20, I think, about the need to pursue policies that better extend the benefits of trade and integration to all. So I think that’s been the IMF view.

On your question about the G-20. What I would say is the way I look at the communique. I think we saw, actually, G-20 consensus revolving around improving, not abandoning, the architecture of free trade. And, of course, how individual countries approach that improvement process is up to them, and the IMF with our 189 members is there to provide support.

What Madame Lagarde said after the meeting was that in that context we should avoid self-inflicted wounds, as she characterized it. And I think, again, that was a sentiment shared at the G-20. Meaning that, we should avoid policies that would seriously undermine trade and openness and productivity. Because that translates into a negative effect on incomes and living standards, which is something we all want to avoid. So that’s the way I read the G-20, to answer your question.

You, and then I’ll take a couple online and then probably have to wrap.

QUESTIONER: Thank you, Gerry. I would like to ask --

MR. RICE: Are we back to Greece?

QUESTIONER: No, we’re not. I’d like to ask about the U.S. budget and the president’s budget on --

MR. RICE: Sure.

QUESTIONER: -- regarding multilateral organizations. I understand there is a cut on Treasury International programs.

MR. RICE: Can you say again? QUESTIONER: A cut. A budget report cut.

MR. RICE: Okay, okay.

QUESTIONER: For multilateral organization, the Treasury’s International Program by 35 percent and that includes, certainly, the World Bank and multilateral banks. I was wondering whether you have estimated if it affects the IMF at all, and whether you at all concerned that these might be an indication of things to come toward, you know, how the new administration views the IMF? Thank you.

MR. RICE: Well, I will speak only for the IMF, obviously. But our reading of it, you know, we’re still assessing the budget outline, but our assessment is it would not have a direct impact. Would not have a direct impact on the income of the IMF. Just for everyone, we are a quota-based institution, and our operations, for example, are not subject to annual U.S. budgetary appropriations, as I think you know.

And your broader point about direction and so on. I will just say what I’ve said here before, which is that the United States is a major shareholder of the IMF, has been a major supporter of the IMF. We’ve had an excellent relationship with the United States throughout our history, and we would expect -- we’re fully expecting that to continue.

Maybe just relatedly, back to the G-20. If you look at the G-20 communique that came out just a few days ago, there’s a great deal of support for the work of the IMF in that communique. I won’t give you line by line here, but if you have time to glance at the communique you’ll see a lot of support for the work of the -- various work strands of the IMF in that communique. So we’re quite encouraged about that.

I’m going to maybe take just a couple online and then probably wrap it up. There’s a question on Mozambique. And the question is whether the audit that’s underway of undisclosed public expenditures in Mozambique, we’re talked about that here before, and asking is that audit going to be made public?

And I can tell you that, yes, the audit will be published. I don’t have the modalities on the timing of the release, but that’s going to be determined by the public prosecutor. But, yes, it will be published. And you know that that audit is something that the IMF has been pushing strongly for.

And there’s another question on Mozambique, so let me just take it. It’s asking about negotiations with the bond holders, and should this happen before or after the negotiation of an IMF financial package with the government, and which should come first?

I really don’t have sequencing on that. The discussions are underway. I just mentioned the audit that has to take place. SoI don’t have a sequencing on that.

And I’m going to take on last one on Belarus. It may be of interest to you also. That requests have been made publicly to the IMF to not give loans to the government. Has the IMF received such letters and, if so, how many and so on?

I am not aware of any letters to the IMF on this. I am aware, from press reports, that there’s a petition ongoing in Belarus. But, again, we haven’t received anything there. On the status of Belarus. Is that your question?

QUESTIONER: That was one of my questions, yes.

MR. RICE: Yeah.

QUESTIONER: But I didn’t ask it. But I understand a delegation --

basically met with

So if you could update that on what was decided?

MR. RICE: Yeah. You’re right. So I can confirm that. That IMF staff discussions with the Belarussian authorities have taken place, continue, and with a view to a possible IMF supported program.

On March 16, to answer your question, in Minsk, an IMF team did meet with President Lukashenko at his invitation. And you asked what the discussions were about. They centered on the economic and social situation, pace of reform in Belarus. I can tell you that one feature of the discussions and an emphasis from the IMF staff team was a stronger social safety net to protect those most in need in Belarus.

Okay. I can tell you discussions about expected to continue into the Spring Meetings here in Washington in April. I am going to leave it there. Thank you very much for your patience today and look forward to seeing you in the coming days. And, again, on April 6. Thank you very much