Transcript

Transcript of a Press Briefing by Gerry Rice, Deputy Director, External Relations Department, International Monetary Fund

April 1, 2010

Webcast of the press conference

MR. RICE: Good morning and welcome to this IMF briefing. I am Gerry Rice, Deputy Director of the External Relations Department at the Fund. I’d like to welcome you and the journalists participating via the Online Media Briefing Center. A reminder: this briefing is embargoed until 10:30 a.m. Washington time.

Just a few words at the beginning on some management travel at the Fund and upcoming events. The Managing Director will be in Amman, Jordan, April 2-4, for meetings with the authorities on recent economic developments in the region and a town hall discussion with students from eight universities in the Middle East/North Africa and Pakistan on ways to address policy challenges facing the economies of the region and its youth. The event will be broadcast live by BBC Arabic TV, radio, and online. That’s from about 15:00-16:30 GMT. A press conference also is scheduled for April 4 at 18:00 GMT at the Central Bank of Jordan. And for your information, we issued a press release yesterday outlining that schedule.

One other thing on the Managing Director travel: On April 10 at Cambridge in the United Kingdom, he will be giving the keynote speech at the opening of the Institute for New Economic Thinking Conference. That’s on April 10.

On April 6-8, Deputy Managing Director Naoyuki Shinohara will travel to Nha Trang, Vietnam, to attend the ASEAN+3 Finance Ministers Meeting.

And then just two other items, on our Global Financial Stability Report and World Economic Outlook: On April 13, there will be the release of the analytical chapters of the GFSR. That’s at a press conference here with José Viñals, the Financial Counselor and Director of the Monetary and Capital Markets Department, as well as the authors of the chapters. That’s on the GFSR, April 13.

The next day, April 14, there will be the release of the analytical chapters of the WEO, the World Economic Outlook, at a press conference here, again with the authors of the chapters. Those GFSR and WEO analytical chapters will be posted under embargo on the Media Briefing Center the day before.

One last housekeeping item: Our next regular press briefing will be on April 15 when we will preview the Spring Meetings in particular and in some detail. And as a reminder, the Spring Meetings Web pages also have a tentative schedule that we encourage you to follow.

So with that, let’s move to the questions, and could I please ask that you identify yourselves and your affiliation.

QUESTIONER: Do you have any update on Iceland, please? I believe that there is a Letter of Intent that’s been sent to the IMF, and a portion of it includes what the government plans on IceSave. Can you give us any details, please?

MR. RICE: Yes, there was a request from the Iceland authorities to the Managing Director to take forward the second review for consideration by the Board. And I can tell you that the Managing Director has instructed staff to work with the authorities towards this end. And, you know, we’re expecting that to be forthcoming in the coming days.

QUESTIONER: So are you talking about the review that is going to take place in the next coming days?

MR. RICE: Yes, the Managing Director has instructed staff to work with the authorities to bring forward the review for consideration.

QUESTIONER: So does that mean that there’s a mission going to Iceland?

MR. RICE: I have nothing for you on the mission in particular, but we do expect that this issue will be taken up by the Board for the second review.

QUESTIONER: There’s been some conflicting views between the way that the Managing Director talks and the action of the government. Is there a majority in the Board for this review? So will it be on the agenda soon?

MR. RICE: In terms of how we work with Iceland--and with any other member country for that matter -it’s ultimately up to the Board to approve a review and for that the Board needs to determine that the program is on track and can be fully financed. And what I can tell you is that the staff’s preliminary judgment is that these conditions are met and, of course, our Executive Board will have to share that judgment, and I think that’s exactly what the Managing Director has been saying.

QUESTIONER: So you do think that the Board will share that judgment?

MR. RICE: Well, as I said, the staff’s preliminary judgment is that these conditions are met, and, of course, our Executive Board will have to share that judgment.

QUESTIONER: Have the Dutch and the British been in some way delaying this process?

MR. RICE: I don’t have anything further for you on the views of the Dutch and the British, but, you know, as I said, we expect this to be under consideration by the Board.

QUESTIONER: Do you have a date for the Board meeting?

MR. RICE: I don’t have a date for you.

QUESTIONER: You said that the conditions, including that the program is fully financed, which means that the Nordic countries that have given money towards that have obviously agreed that they ought to provide the financing for this?

MR. RICE: Again, I can only repeat that the staff’s preliminary judgment is that the conditions are met, and our Board will have to share that judgment for it to go forward.

ONLINE QUESTIONER: Is there an exact date for the IMF team to visit Turkey in May? Who will be in the team from the IMF? Is there any possibility for Turkey and IMF to start talks on a Stand-By?

MR. RICE: We expect that to be around mid-May, and when we have a more exact date, we will get that to you. The Turkey mission team, which I think most people dealing with Turkey know, is led by Rachel van Elkan who is our mission leader. As to whether there is a possibility of a Stand-By, here I’d say the focus right now is on the Article IV. Let’s let the Article IV take place and take stock once that has been completed.

QUESTIONER: Where do we stand on Greece? We had a bond sale and that didn’t go so well--widening spreads. Where do you stand on Greece? Have you had any new contacts with the authorities of the past days? Have they come to you with a request? Are you getting ready to get into the EU/IMF mechanism?

MR. RICE: Well, there’s been a fair bit of commentary from the Managing Director on Greece in the past days. Where we stand, as he has said it, we’re monitoring the situation closely; that we remain ready to assist Greece if asked by the Greek authorities.

QUESTIONER: I take it you haven’t been asked?

MR. RICE: We have not been asked.

QUESTIONER: I have a question on Ireland. We’ve seen the government moving to prop up the banks and recapitalize. One of the biggest one is a major loss for the biggest bank. I was wondering whether you think that the recapitalization has gone far enough and how much more needs to be done. And are you concerned about the situation--the financial sector situation in Ireland?

MR. RICE: The Irish government’s extensive and ongoing support we feel has been vital to maintaining financial stability. The establishment of the National Asset Management Agency, and this week the transfer of the first tranche of eligible assets from the designated financial institutions to the NAMA, represent important steps. In terms of the recapitalization efforts, public assistance to the Irish banking system is substantial. To ensure that banks can withstand future losses, the government has moved in the right direction by requiring additional capital to cover additional risks.

ONLINE QUESTIONER: At the U.N. yesterday, Mr. Strauss-Kahn said that the IMF has yet to forgive Haiti’s debt. By contrast, the IABD has already forgiven $479 million. Can you explain the IMF’s delay and exactly what Executive Board Meeting it will be when Mr. Strauss-Kahn will actually propose forgiving Haiti’s debt?

MR. RICE: In response to this question, I’d really like to refer you to the statement that we issued yesterday from the Managing Director when he attended the high-level conference in New York City. And on the issue of debt relief, what he had said was that there was a framework--staff was preparing a framework to be put forward for consideration by the IMF Executive Board on the issue of debt relief and the IMF.

QUESTIONER: On Pakistan, you issued a statement in which you said that the review has been delayed and that the Pakistanis had missed their budget deficit target. Can you tell us by how much or have you any more details on that?

MR. RICE: I can tell you that the IMF mission recently held discussions for the fourth review. Pakistan’s program is progressing well. All performance criteria for end-December 2009 were observed except for the budget deficit target, which was missed by a small margin as you were indicating. The Executive Board discussion for the fourth review is being rescheduled for the first half of this month--April--in order to allow for the submission of VAT laws to provisional assemblies, which have now been submitted. Disbursement of the funding will take place when the Board completes the review.

QUESTIONER: I read that statement and I was a bit confused. Do the regional assemblies actually have to pass those laws before the issue will go to the Board?

MR. RICE: I don’t have the details of the regional assemblies, but, as I said, the Board discussion for the fourth review is now rescheduled for the first half of this month in order to allow for the submission of those VAT laws to the provisional assemblies, which we understand have now been submitted.

QUESTIONER: On Ukraine, can you tell us whether you think there’s going to be an agreement or whether an agreement is close with the Ukrainian government?

MR. RICE: On Ukraine, let me say that the Fund mission that is now in Kiev has had productive meetings with the new government representatives of the presidency and the National Bank of Ukraine on an economic program that could be supported by the Fund. The focus has been on policies for 2010, including the budget and financial sector reforms. While significant progress has been made in many areas, a few issues remain outstanding. We will continue our discussions with the authorities in the coming weeks, including through our resident representative office in Kiev. Let me add that we expect the mission intends to return to headquarters tomorrow--that’s April 2—as planned. And as said, discussions will continue between the mission and through the Resident Representative’s office.

QUESTIONER: So they can return with or without an agreement I gather?

MR. RICE: There’s going to be a report to management, as is the norm, and discussions continue.

QUESTIONER: I was going to come back to Iceland because I’m a little confused. Just so there is no confusion, the staff’s going to now prepare a report which they will then submit to the Board? Is that my understanding?

MR. RICE: What I had said was that the review would be put forward for consideration by the Executive Board, and it was the staff’s preliminary judgment that the conditions have been met, but, of course, it’s for the Board to share that judgment, as is the case in every circumstance.

QUESTIONER: Do you how much their tranche is going to be if it is approved?

MR. RICE: I don’t have it--can I come back to you on that.

ONLINE QUESTIONER: Can you please confirm or deny that member countries of the IMF thumbed down on March 25 a proposal to gather USD100 billion a year starting 2020 to help poor nations adapt to the effects of climate change?

MR. RICE: On this one, what I’d like to say is as the Managing Director has said many times, climate change is an important issue of global concern. Our contribution is that we look to the particular issue of how to help developing countries finance the challenges posed by climate change. And the recently published staff position note outlined a potential staff proposal, and the ideas set out in this note are being offered purely for consideration by the international community and as a contribution to the broader public debate.

QUESTIONER: I’m going to just come back to Greece. Has the IMF figured out how this might work. Can you enlighten us on maybe on how the Fund sees its role within this mechanism?

MR. RICE: Well, you know, is the general process for how the Fund works with any member country that might be seeking financial assistance. When the member country approaches the Fund and requests financial assistance, we send a mission to the country for consultations with the authorities and agreement on the best way forward. In that sense the Fund has an advisory and consultative role in supporting the most viable economic program possible.

Once a program has been mapped out, Fund management, and ultimately again the Executive Board, approve the arrangement. And this is the standard process in these situations between member countries and the Fund. Maybe just add a little bit, but in our discussions on Eurozone countries again, generally we, of course, consult not only with the authorities, but also European institutions given that they fall under the Stability and Growth Pact and are members of the European System of Central Banks in the European Central Bank.

QUESTIONER: But, you see that’s where the tension comes because Greece would fall under the Eurozone rules. It’s a jurisdiction where the ECB has its rules and sets monetary policy. That’s also where the Fund comes in. Could you -- would you envisage then some sort of agreement on what the EU and the ECB takes and what the Fund takes? Any sort of idea?

MR. RICE: I’m not going to speculate beyond what I’ve just said.

Anything further? Good, then we’ll wrap up this briefing and, again, just to remind that the embargo is 10:30 a.m. Washington time. And I wish you all a happy April 1. Thank you.