Transcript

Transcript of a Press Briefing by Caroline Atkinson, Director, External Relations Department, IMF

March 4, 2010

Webcast of the press conference

MS. ATKINSON: Good morning and welcome to the press briefing. This briefing, as usual, is embargoed until 10:30 a.m. Washington time, 1530 GMT.

Before I get to your questions, there are just a few traveling arrangements that I wanted to let you know about. Some of you are going to be involved in them.

Mr. Dominique Strauss-Kahn, the Managing Director of the IMF, is going to be visiting Africa from March 7 through 11 to discuss the opportunities and challenges facing Africa in the wake of the global crisis, and this is exactly pretty much a year after a major conference that we held in Tanzania with the Tanzanian government. On the trip, Mr. Strauss-Kahn will visit Kenya, South Africa and Zambia, and he will meet with the authorities, civil society, university students and the private sector.

In Nairobi in particular, he will participate in a panel debate “Africa's Economic Transformation: the Road Ahead,” which will also include Kenya's Prime Minister Raila Odinga; Deputy Prime Minister and Minister of Finance, Uhuru Kenyatta; Nobel Peace Prize Winner Wangari Maathai; Bob Geldof, rock start and activist; and Transparency International's Akere Muna. We expect that to be a very interesting panel debate that will be made available.

The following week, the Managing Director will be traveling to Brussels during March 17 to 19 for the Annual Meeting of the European Parliament's Committee on Economic and Monetary Affairs. That takes place on March 17 with E.U. national parliaments, and he will speak as part of a panel debate on modernizing the global financial architecture. That event is open to the public and the press. Then there will also be a conference hosted by the European Commission on “Building a Crisis Management Framework for the Internal Market” in the morning of March 19. That's in the form of a public hearing and the Managing Director will speak on “Crisis Management Arrangements for a European Banking System,” again open to the public and the press.

Let me now turn to your questions, those of you participating online and those in the room.

QUESTIONER: —yesterday the Prime Minister of Greece, George Papandreou, warned that unless the new measures –-(inaudible)— Greece will turn to the IMF. Do you have any comments on this?

MS. ATKINSON: I don't have anything beyond what we've said many times before, which is that we are assisting with our technical expertise the Greek authorities and the E.U. Commission at their request, and we understand that there is an intention by Europe to deal with this problem.

QUESTIONER: But if Greece comes and asks for the money, are you going to give them the money?

MS. ATKINSON: As I said, that's a hypothetical question and I'm not going to go there. As we've said before we expect that we stand ready to assist; we expect that Europe will be able to fix this problem. I believe that's what the Managing Director said, and we are helping at their request in technical expertise.

QUESTIONER: You've welcomed the fiscal measures announced yesterday by Greece. Is there anything that you think within those measures, or do you have more of an opinion about how they could possibly affect GDP and the economy as a whole?

MS. ATKINSON: No, I don't have anything for you on that. Obviously we think those are good measures and so ultimately they will be in the interests of the Greek people and the Greek economy over time.

QUESTIONER: So to understand, you approved the new — do you approve the austerity plan?

MS. ATKINSON: Yes, absolutely. Yesterday we welcomed the substantial fiscal measures and we commended the authorities for having put together a strong fiscal package for this year and noted that the implementation of it would be a crucial step in a multiyear process.

QUESTIONER: So you think that this plan is going to solve the problem of Greece?

MS. ATKINSON: As I said, we believe this is a strong package that is an important step forward.

QUESTIONER: You did also say that there was a need for reforms and to increase growth and productivity.

MS. ATKINSON: Absolutely.

QUESTIONER: What I was reading from that was that you didn't think that those measures actually addressed those and that therefore additional reforms were needed to spur growth.

MS. ATKINSON: I think we said what we meant to say, which is that we encourage the authorities to develop and implement soon significant reforms that will boost productivity and growth and these will complement the fiscal consolidation that is underway.

I have a question online. He says that economists in the E.U. have been suggesting creating a new European Monetary Fund in order to help suffering Euro countries like Greece. Would this be compatible with the IMF or pose a serious threat to the institution? I've seen these press reports. I'm afraid I have nothing for you on that. We've of course made general comments about the value that they can be in regional arrangements as well as the IMF, but I have nothing for you on that plan.

QUESTIONER: I have a question on Iceland. The authorities are now saying that their economy may be more affected than initially planned because of the air package being stuck. Do you see a review coming up? Do you think that any deal can be reached despite the situation of Icesave? What is the update on Iceland?

MS. ATKINSON: I think that things stand in Iceland pretty much as they have done for a while, which is that discussions are continuing. I know the referendum is scheduled for this weekend. As we've said before, we don't see that agreement as a condition for moving forward ourselves, but we do need to satisfy financing assurances for the program to move forward. I don't have any comment for you on what might happen after the referendum, but of course when we do we'll let you know.

QUESTIONER: This is about Ukraine. You've seen the Ukrainians talking about needing additional funding for the IMF program to go ahead. Can you give us your take on what's going on in Ukraine right now and where the Fund's program stands?

MS. ATKINSON: The Fund's program stands where it has stood for a while, and we have been looking forward to there being a government established and in place and ready to talk to us about taking that forward, and that's where we are.

QUESTIONER: The Prime Minister of Greece is coming to D.C. next week. Do you have any idea if he is going to have any meetings with anybody at the IMF, if he asked for any meeting?

MS. ATKINSON: No meeting is scheduled between him and any member of the Fund management during the trip.

I have a question online about Chile. Did the IMF's projection for the growth of Chile this year change after the huge earthquake? First of all, I want to express my great sympathy and concern for the people of Chile, and the Managing Director of course already did that at the time of the earthquake. We are working now in estimations of what this might mean for overall growth. We don't have any numbers for you yet. We believe that partly because of the strength of the economy beforehand and the fact that this earthquake was not in a central manufacturing or productive area, the effect on GDP may not be very large. I think the big impact is the immediate humanitarian and social cost that obviously everybody is seeking to address.

QUESTIONER: I want to come back [on Greece]— so there is no meeting scheduled for now but they could still schedule something or has there just been an indication?

MS. ATKINSON: The indication is we don't have a meeting scheduled. Actually, the Managing Director himself is going to be out of the country and no meeting is scheduled. I wasn't trying to play around.

QUESTIONER: It's just that by now they haven't worked in their schedule something with the IMF so I was asking if there were indications they would when they get a time to meet.

MS. ATKINSON: We have no meeting scheduled. I have a question online from Turkey, saying “Is there an improvement in talks with Turkey?” and “Turkey wants a deal with the IMF?” Again I'm afraid that I don't have anything new for you on Turkey. We continue to remain in close contact with the authorities.

QUESTIONER: What is the status of gold sales?

MS. ATKINSON: The gold sales — we announced [on February 17] that after completing [around] half of the planned gold sales through direct off-market sales, we planned to sell up to 191 million tons for the remaining amount on the market. This will be done in the context of, or in a similar fashion to, the sales by central bank holders of gold in the past so that it won't perturb the market. We will announce when these are completed. They will be done over a period of time.

QUESTIONER: Thank you. So there have been no sales on the market at this point?

MS. ATKINSON: I don't think that we are going to announce. They are going to be done in a phased manner over time and I suspect that we don't have a set timetable, and I don't have anything for you on that. I think we probably will announce as things are done. What we have announced is that sales will be proceeding over a period of time.

QUESTIONER: I have another question [on Greece]. Did you have any involvement for this plan? Did your people who went to Greece help the Greeks to prepare the austerity plan?

MS. ATKINSON: I think the Greek authorities prepared a plan with the E.U. as you know and we've been providing technical expertise at their request.

I have a question online about the IMF's third tranche to Sri Lanka due in March. I believe we have announced that the mission's return from Sri Lanka that we don't have an agreement with them so we don't expect that the third tranche will be released at least until we have an agreement with them.

I understand there are more online questions so we have to wait for technology. I don't know if any of you in the room have anything else.

QUESTIONER: Again I want to ask about your involvement. How did you help them? What do you mean when you say technical support?

MS. ATKINSON: We have technical expertise. The E.U. was negotiating with the Greek authorities and they asked for some technical expertise and that's as much as I can give you.

QUESTIONER: In the paper you wrote for the Deputy G-20 meeting in Korea, you mentioned risk and sovereign debt as being one of the threats to growth. Are you watching what's happening in Greece and in the Euro region? Are you monitoring it also for emerging Europe? Is that one of the things you're monitoring as a possible contagion region?

MS. ATKINSON: I'm sorry?

QUESTIONER: Are you monitoring possible contagion risks on emerging Europe?

MS. ATKINSON: We're always monitoring and worrying about everything. I think we've spoke before about contagion, that there can be reasons for it to be limited. I think what we've seen most recently is that markets tend to distinguish when policies are stronger.

I wanted to go to a question that I'd had online about Hungary. He was asking if there was significance in the mission meeting with the opposition party when they were there. I wanted to note that it's common practice that we will meet with — and this has happened before — that we've met with the opposition party, and of course there were no negotiations with people who were not in the government, but an informal exchange of views.

I also have a question from Mexico: “Has the Mexican government notified to the IMF Board about its intention to [reuse] the flexibility credit line in 2010? If so, what will be the new amount and what interest rate?” All I can say is that we and the authorities have felt that the flexible credit line has been successful and has played an important role over the past 10 months. Secretary of Finance Cordero and Central Bank Governor Carstens have publicly indicated Mexico's possible interest in a possible renewal and of course we stand ready to discuss that.

Thank you very much indeed and I look forward to seeing you again in 2 weeks' time.