Transcript

Transcript of IMF Press Briefing

September 14, 2017

Mr. Gerry Rice, Spokesperson and Director of the IMF Communications Department

MR. RICE:  I'm Gerry Rice, with IMF Communications Department.  And as usual, this morning our Briefing will be embargoed until 10:30 a.m., that's Washington Time.

And as usual, this morning I will make some opening announcements, on events, and then come to your questions in the room.  And I see we have quite a few callers online today as well today as well, so we'll take some of those questions too.

So, let me begin with a few announcements regarding travel and events here at the Fund.  And the first thing I want to mention is next Monday, September 18, the Managing Director, Christine Lagarde, will be giving opening remarks at a Brookings Institution Forum on Anti-Corruption issues.  So, that's next Monday morning.  I believe it's open to the press, to you, if you are interested.

Following that, in the second part of Monday morning, Madame Lagarde will be making opening remarks, and having a conversation on stage with Mark Carney, the Governor of the Bank of England, here at the Fund, and this will be the Michel Camdessus Central Banking Lecture.  If you recall, we've had Janet Yellen, Mario Draghi, Governor Zhou of China; and now it's Mark Carney.  And that's going to begin here at the Fund at 10:30 a.m.  And again, you are most welcome.  It's an open event.

Then on Tuesday, September 19, and Wednesday the 20^th, Madame Lagarde will be in New York for events relating to the U.N. General Assembly Meeting, where she is doing a number of events, and most of them open to the press, including a conversation at the high-level panel, U.N. panel on Women's Empowerment. And she will also be participating in a discussion at the Bloomberg Global Business Forum with Justin Trudeau, Jack Ma, and others.

Let me also mention that a little bit later in the month, September 28, 29^th, Madame Lagarde will be in London, where she will be delivering the Keynote Speech at an event marking 20 years of independence for the Bank of England.  So, that's toward the end of the month.

A few other things regarding our Deputy Managing Director's, the MD, Mitsuhiro Furusawa is in Cameroon today, after a visit to Burkina Faso; he will be meeting with the authorities and doing some other public events, tomorrow he'll be delivering a speech that we'll make available to you, of course.

One of our other Deputy Managing Directors, Mr. Tao Zhang, will be participating in the NABE Conference, that's the National Association for Business Economics, as I think you know, that's taking place in Cleveland, in this country, Cleveland, Ohio, on September 24 to 26, that's the NABE, and I know a number of you follow that.  On September 25^th, Mr. Zhang will deliver a speech on Global Economic Challenges and Opportunities.

Let me mention to you.  The Annual Meetings are coming into view.  I know that many of you look at the analytical chapters that we publish in advance of the World Economic Outlook and the Global Financial Stability Report.  So, we will be releasing the analytical chapters of the WEO on September 27, and for the GFSR, the Global Financial Stability Report on October 3^rd, and we are doing these via this new round table discussion, webcast live, with you; is the way that we do this now.

So registration is open for the meetings.  And further down the road, it seems like a lifetime away at this point, but let me just mention it for your calendars.  November the 2^nd and 3^rd will be the Annual Research Conference, here at the Fund, with many of the stars of the economics world coming here to the IMF, with a number of those sessions open to you.

And later that month, our Fifth Statistical Forum will be held on November the 16^th and 17^th, on I think a quite interesting topic of: How to Measure Statistic in the Digital Economy.  So, more information available on the website on those things.

And then finally, before I take your questions, I want to welcome to our family here, Delphine Touitou of Agence France-Presse.  Welcome Delphine.  And I want to welcome Josh Zumbrun of the Wall Street Journal, joining us today.  Glad to have you with us.  I also want to say, I don't know if it's farewell, au revoir, to Ian Talley,

SPEAKER:  Tally-ho. 

MR. RICE:  Tally-ho.  That's a good one here.  But I want to say, you know, we'll be seeing Ian down the road, he's moving on to some other things, and a new incarnation.  But Ian has been a tremendous contributor to this forum and to our work on communication at the Fund.  Asking us sometimes very tough questions, but always good questions, and enormous respect for the work that Ian has done and wishing him all the best into the future.

Let me turn to your questions in the room, if there are any.  Good morning.

QUESTIONER:  Good morning, Gerry.  And so, when is the Mission planning to go back to Athens?  And do you think Mrs. Velculescu will still be in charge of this mission?

MR. RICE:  Your last question was about Delia?

QUESTIONER:  Yes.

MR. RICE:  Yes.  I can confirm that Delia Velculescu, who is the IMF's mission chief for Greece, will indeed be leading the upcoming Mission.  Let me just back up on the Mission just for a minute, since it's been a little bit since we've briefed.

So, where we stand, is last July, the IMF Board approved in principle, a new precautionary standby arrangement for Greece, which, as we said at the time, without a doubt represents a strong endorsement by the IMF of Greece's adjustment program, and provided that program stays on track, provided there is the availability of financing, which of course depends on debt relief assurances from the European partners.  We expect that to move forward.

Again, the clarity around the debt relief is essential.  So, the program involves a series of reforms that are to be implemented over time, the time table is pretty clear, the reforms are pretty clear, we published all the documentation in the second half of July.

So, coming to your question: A fact-finding, technical staff visit from all three institutions, that's the IMF, the ECB and the EC, the European Commission; is currently in Athens taking stock of those recent economic developments and the implementation of the agreed reforms supported by the program, and we expect this will be followed by a full mission in due course. Good morning.

QUESTIONER:  Good morning, Gerry.  Thank you. I'm wondering.  There have been a lot of reports about extra requests, or so they are asset quality review of the IMF, especially regarding the bank recapitalization needs.  Is there something that is not so clear in the report that you’ve already published with the mission program, because it doesn’t seem that it is there.  So, could you, please, clarify on that front?  Are you asking for more, for the recapitalization of the banks?

MR. RICE:  So, you know, the way I would put it, is I think the parameters and the commitments under the current program have been transparently spelled out, and agreed by all parties concerned, and I think we are all working in good faith, and within the Fund's long established rules to help achieve them.

As you all know, who follow the Fund closely, the program is an evolving matter and, you know, sometimes can be updated in light of circumstances, and these are things that are discussed with the authorities, discussed with the partners, and then implemented.  I am not aware of any additional conditions, if you will, at the moment.  But again, the program can evolve over time, and has evolved over time, and that's just standard procedure.  But again, I am not aware of any specific new conditions that are under discussion.

On your specific question about I think you were asking about the Asset Quality Review of the Greek Banks.  You know, what I'd say on that, we, as usual, collaborate closely with the ECB and others on all aspects of the Greek Program, safeguarding the financial stability of the system is a major objective of the program, as is returning the banking sector to health.

The way I would respond is really by referring to the Staff Report that we publish toward the end of July.  And just a reminder on that, I'll just quote, it may be helpful.  We are saying that it's critical that the authorities undertake an asset quality review and stress test before the end of the ESM Program, to ensure that the resources set aside for bank rehabilitation in this program are utilized in a timely manner, if needed.

An assessment of the financial sector strategy and plans in this regard will be the focus of the first review of the program, supported by the arrangement.

QUESTIONER:  If I may, this actually refers to something that should be done by the end of the program and now we haven't even started the first review of this program, so the timing of the reports is disconcerting a little bit.  Is it something that you're asking in advance?

MR. RICE:  I think what we are seeing here is that, you know, it will be part of the first review.  Welcome, from New York. 

QUESTIONER:  Last week Macron, during his visit in Athens, said that the IMF should not be meddling in the European debt management and he also urged IMF to show good faith in upcoming Greek debt talks.  He also said that the IMF role in the end of these talks must be in good faith and without adding further conditionality.  Would you like to make a comment on this?  And the second question if you will allow me, regarding Madame Lagarde visit to Greece.  Are there any updates?

MR. RICE:  Thank you.  So just on the last one, no update on the date.  I think you know Madame Lagarde had been invited by the Greek president, kindly invited to visit Greece, and Madame Lagarde had responded positively to that and thanked the president for the invitation but we don’t have a date for that visit as yet. 

Now on your other points, you know, as I said earlier, the IMF always works in good faith.  That’s a baseline.  And, you know, what I would say is our work in Greece as in all member countries is undertaken at the request of the authorities and in this case, in close collaboration with the European institutions and that’s been true throughout the experience of the Greek program which has been sometime as you know so we are working at the request of the Greek authorities and in collaboration with the Europeans. 

Again as I say for all our members we do not enter into financing arrangements.  We cannot except at the request of the authorities.  So that, you know, I think responds to it.  So part of what you were asking, the again as I said earlier the parameters, the commitments under this program are pretty clear.  The objectives are clear.  The Greek government has committed to these objectives and so when its implementation that is under way and that's what we are monitoring. 

And as I said earlier in terms of conditionality and adding new or different elements, you know, a program is, it’s an evolving matter because circumstances can change, I mean, you want to be, we want to be as responsive as we can to our members needs but as I said I am not aware of any new specific measures that are being requested at this point.  Where we are is there a fact finding mission in Athens right now and, you know, they will be discussing with the authorities the status and we will keep you updated on that. 

Shall we finish on Greece -- did you want to come back later?  Okay.  If we have time.  This is going to be Ian Talley's last question at a press briefing   so --

QUESTIONER:  Well, you never know.  I may come back to haunt you.  Well, it is bitter sweet for me too, I'm going to miss being able to grill you and our verbal jousting.  And I just want to say to the Greeks in the room, I mean, does any other country represented so well in terms of helping to understand and deliver understanding for a program?  I think that's, you know, critically important to counties. 

But aside from that, Ukraine, Deputy Managing Director Lipton was there.  They may be still there, I don't know if he has left.  Has he come back or is he coming back with hopes for review or discouragement because the program is going off track and secondly I would like to ask about Venezuela and we can come back to that though. 

MR. RICE:  Yes, well you may have seen, I mean, David said quite a lot publically, Ian, as I'm sure you followed yesterday in Ukraine where he met with the authorities and yes he is back today.  I don’t really have a lot to add to what David said, what Mr. Lipton said publicly.  On the review, on the fourth review I think what I would say is we expect that will be possible once the policies needed for the review are implemented.  I think that you know and David and the authorities talked about this yesterday that some of the major issues are pension, reform, the measures to speed up privatization, concrete results in the anti-corruption effort that is underway and of course it will be key the program remains on track, fiscal and energy sector policies remain consistent with program commitments. 

So in the wake of David's discussion, Mr. Lipton's discussion with the authorities, we would expect that, you know, a mission would be going back to Ukraine in the near future to look at these things.  I don’t have a date for you on that.  Again David said a lot.  He, yesterday he stressed the importance of speeding up the reforms to achieve stronger economic growth and some of the other elements which I mentioned and important to say in response the authorities stressed their commitment to the program and, you know, the close cooperation with the IMF. 

QUESTIONER:  Venezuela, does the U.S. government has called Maduro's constituent assembly illegitimate and I'm wondering if the IMF recognizes that constituent assembly as a legitimate government and would it deal with a Maduro government should there be a request?  And secondly, has there been any communication with Caracas directly about any IMF involvement?

MR. RICE:  You know, in terms of recognition of governments and political subsidiaries of governance and I think you know we follow the U.N. and their recognition so, you know, we are consistent with that. 

On your second point, we have not had an opportunity to discuss developments and policies with the Venezuelan authorities for a long time.  We would welcome that reengagement with the Fund including resuming at normal Article IV consultation.  So we just haven’t been able to assess the situation there in detail for a long time for that reason. 

QUESTIONER:  Okay and but there is an alternative director from Venezuela that sits on the board.  There was a recent IMF briefing, a board briefing.  Is that alternative executive director not seen as a representative of the government like all the other board members and then just one more question on Mozambique. 

MR. RICE:  You know, I believe the Venezuelan chair was, you know, regarded as having the responsibility to speak for Venezuela at that time.  I don’t have further details on what was actually discussed at the meeting.  I believe it was an informal briefing on Venezuela and as you know we have those informal briefings on many countries over time. 

QUESTIONER:  And then just finally on Mozambique, can you give us an update on this status there, the -- yes, that would be good. 

MR. RICE:  Yes I can do that.  As many of you know who follow this, we have been discussing with the Mozambique authorities a possible new program for some time.  We're engaged in those discussions.  As you know again those who follow it, there has been the issue of an audit on some of the public expenditures in Mozambique and we are encouraged that the delivery of that international forensic audit has taken place and we are encouraged by that because transparency and good governance are key.  So the -- where we stand, the summary of that audit report was published.  Now we would like to see and look forward to the publication of the entire report. 

So I think as we noted in our communication during the last visit to Maputo, we believe it is key for the authorities to provide the missing information, highlighted in the audit summary and in particular critical information gaps record, regarding the use of loan proceeds.  So taking steps to fill the information gaps and to strengthen transparency and ensure accountability will be critical to progressing toward a new program.  So that's where we are on Mozambique.

QUESTIONER:  Good morning.  Andrew Maida with Bloomberg News.  Just one question for you.  I know Madame Lagarde was in the region recently, Asia that is. 

MR. RICE:  As of last night. 

QUESTIONER:  Yes.  Since we last had a chance to speak with you there has been obviously a lot of rhetoric about the nuclear situation in North Korea.  I know that in past economic outlooks the Fund has highlighted geopolitical risks as one of the possible downside risks to the global economy.  And what can you tell us about how the Funds view has evolved in terms of geopolitical risk in light of all the saber rattling over North Korea?

MR. RICE:  You know, we've seen more about this, Andrew, at the time of the annual meetings and the WEO and so on we clearly keep a close eye on these geopolitical risks and how they might interplay with the economic risks.  Madame Lagarde actually was asked about this several times over the last week or so in a couple of Asian countries, so maybe best just to remind and summarize a little bit of what she said which was that -- the way she put it was we see every downside in the escalation of tensions and every upside in trying to resolve those tensions and trying to reestablish certainty rather than uncertainty.  I'm almost quoting her there.

More broadly, what she said in Korea recently was that it's encouraging to see that South Korea and the region remain resilient and beyond that it's difficult to speculate on the possible economic impact of further geopolitical tensions in the region at this stage.  I think we all hope, of course, for a peaceful path forward.

I'm going to take you and then go online for a little bit.

QUESTIONER:  An easy one.

MR. RICE:  Always.

QUESTIONER:  Gerry, many people in Europe are saying that the IMF actually is playing a game in Greece and that you don't really care for a positive outcome.  The Prime Minister of Greece was very vocal last week.  He said, and I quote, that "We can live with or without the IMF presence.  What we cannot do is live with the IMF setting one foot in and leaving one foot out."  He said also that at the end of the year would be a reasonable timeframe for the (inaudible) decide what to do.  So, my question is are you ready to declare this saga over, this tragedy?  Because as you know Greece is under programs for seven-and-a-half years. 

MR. RICE:  Thank you, Michael.  Look, I think I responded to parts of what you're asking earlier.  Number one, the IMF and I think everyone else is acting in good faith to try and support Greece and get Greece back on a sustainable path.  The IMF as you know has devoted a very large amount of resources, financial and otherwise, to the Greek program over the years so I think any question of the IMF's commitment, the IMF's seriousness, the IMF's support for Greece I think is really beyond question. 

Most recently, as you know, we have as I mentioned earlier -- our Board approved in principle the new arrangement for Greece and the IMF has taken a very strong position in support of in particular debt relief for Greece.  And I think the IMF has been among if not the strongest among the strongest advocates of debt relief for Greece.  That's been true in the past and it's true today because we feel that the debt sustainability of Greece is essential to Greece returning to the international capital markets and having a recovery that can ensure employment and growth.

So, I just say all these things to indicate the utter seriousness and respect that we accord to our relationship with Greece and the work that we do with Greece.  We are working as hard as we can, as fast as we can, to bring the new program into operation and we would like that to happen as soon as possible. Are we on Greece?

QUESTIONER:  Yes.

MR. RICE:  I'm going to make this the last one on Greece, yeah.

QUESTIONER:  There are reports that at this moment tax collection performance is not going that well in Greece.  And sources from the Greek Department of Treasury claim that over-taxation of self-employed workers has backfired and led to even higher tax evasion.  Are you concerned about this development and do you plan to ask for additional measures if it becomes necessary for keeping up with the primary surplus target?

MR. RICE:  You know, the fact-finding mission team is in the field.  They're going to be looking at this issue as well as others so let's leave it to them and we'll be reporting back in due course. 

This is definitely the last one on Greece. 

QUESTIONER: On the banking sector.  Is the answer that quality is deemed necessary for the IMF in order for the approval in principle to be valid?

MR. RICE:  As I said, it's one of the elements that's going to be discussed as part of the ongoing monitoring and implementation of the program so it's an important element.  What we said is the program cannot go forward without the assurances on debt relief so that remains the overriding issue in terms of the IMF moving forward with the program.  It's back to the two legs in many ways of reforms and debt relief.  So we have, as I said, given a strong endorsement to the reform program that Greece is undertaking but now we need to see the debt relief.

Let me take some questions online and then I'm going to try and wrap this up.  There's a question about the hurricane impact and particularly on Antigua and Barbuda.  The question is from Matthew Lee asking about what's the IMF doing?  Will there be a debt moratorium for Antigua and Barbuda? 

On that I would refer to what Madam Lagarde said a few days ago about, of course, the IMF has tremendous sympathy and we're saddened by what has happened in the region, the reports of lives lost and the property damage from Hurricane Irma.  She also said, and I'll repeat, that we stand ready to help our members in the aftermath and there are a number of options that we can look at in that context. 

But at the moment we are still trying to make an assessment.  We're working with the authorities on that, we're working with other partners on that in terms of trying to get a handle on the impact.  And just as a factual matter at this point none of our member countries including Antigua and Barbuda have formally requested assistance from the Fund.  Again, they are assessing things; it's a very early stage.  It does take me back, actually, to the point that I was mentioning earlier that without the request from authorities the IMF cannot move forward.  A very different context, of course.

There is a question about the debate about a European monetary fund.  He's asking about the European monetary fund is concentrated in the proposal that the ESM will develop into an institution that resembles the IMF even more than it does already.  Do you believe that in such a case the international role of the IMF will be degraded? 

MR. RICE:  What I would say on that is that in the case of Europe the European stability mechanism is already playing an important role in Europe.  Beyond Europe actually many other regions have developed similar financing arrangements and we work cooperatively with all of them in Asia, in Africa, and in Latin America.  So, our mode is very much one of collaborating with partner institutions and, of course, we've been working with the European institutions now for quite some time. 

There is another question, it is from Nigeria, Business Day.  It's asking, we have read some press reports saying that the former managing director of the IMF, Dominique Strauss-Kahn has helped African countries to secure financing from the Institution, and can you confirm that?

On that I would say that what's true for all countries is true in this case, which is that the discussions between the IMF and our member countries are exclusively between Fund staff and the authorities and press reports otherwise including this one are false.  Just to be very clear on that.  Discussions on programs are between the IMF and the authorities exclusively.  So, I just want to be clear on that. You've got the last question.

QUESTIONER:  Just a quick hurricane follow-up.  Do you have anything on the impact on the U.S. economy potentially of the hurricane?  I mean, I know it was less damaging than expected.  Do you have anything on the IMF's view on that?

MR. RICE:  I've seen some reports from other organizations on that.  We're still looking at it and it would be premature to get into that right now in terms of forecast.  It's something that we'll be looking at, Andrew, as we head into the annual meetings.  We'll have a bit more granularity on that and be able to give you something more specific in terms of impact on the forecast for U.S. GDP.

Look, thanks again for coming and we'll see you in a couple of weeks.