Transcript

Transcript of a Press Briefing by Gerry Rice, Director, Communications Department, International Monetary Fund

June 6, 2014

Webcast of the press briefing

MR. RICE: Good morning, everyone and welcome to this press briefing on behalf of the International Monetary Fund. I'm Gerry Rice, Director of Communications here at the Fund. As usual, our briefing this morning will be embargoed until 10:30 a.m. That's Washington time.

Let me begin with a couple of announcements. Then we'll move to the questions in the room and online. Just a couple of things today. The Managing Director, Christine Lagarde, will be in London tomorrow. That's June 6th where she will take part in a press conference at the conclusion of the Article IV mission for the United Kingdom. Later in the day, she will deliver the 2014 Amartya Sen lecture at the London School of Economics and we will have that speech made available to you as usual.

Then on Monday, June the 9th, the Managing Director will be in Canada, in Montreal, where she will speak at the Conference of Montreal, the International Economic Forum of the Americans. And again, we will make that speech available to you in the usual way.

As I mentioned here the last time, we are in the season of major Article IV concluding missions and statements which, of course, are then subject to the discussion and approval of the our board. But just, I mentioned the UK. Tomorrow we did have Japan. A few days ago we had China. Today, earlier today, which you may have seen and I can tell you that the press conference for the United States will be on the June the 16th.

So with that, let me come inside the room.

QUESTIONER: I would like to know why do you postpone the publication of the Greek report and when are you planning to publish it?

MR. RICE: We would expect these documents, this package, Elaine, to be with you very soon, in the next few days. It's an internal processing issue. It's not unusual. As you know that there are delays sometimes in processing these packages.

We want to put it out in a way that's convenient to you. So we want to make sure we put it out, that you have it under embargo with a little bit of advance to digest it. It's a big package. But again, within the next few days, very shortly.

QUESTIONER: I'd like to ask you whether finance minister, the Greek Finance Minister Mr. Stournaras made -- met with Ms. Lagarde in Paris this week, Tuesday or Wednesday, and what they discussed.

MR. RICE: I can confirm that meeting took place in Paris on Tuesday with Madam Lagarde and the Finance Minister, Minister Stournaras. Paul Thomsen, the mission chief, was also in attendance at the meeting. The discussions were on the way forward for Greece and on issues of common interest.

QUESTIONER: Let me just follow up. Did they have to see with the review, with this particular staff report? Is there anything that's pending? Is there any problem or?

MR. RICE: I don't have details of the discussionbeyond confirming for you that the meeting did take place. As you know, we just approved the fifth review last Friday and the disbursement, so all of that is going ahead.

QUESTIONER: And Gerry, is it possible to give us a readout from this meeting because there are a lot of reports around? For example, that the Greek government and the IMF and the Europeans started the talks on the Greek debt. Can you confirm that?

MR. RICE: I don't have anything on the contents of the discussion, , beyond confirming that the meeting did take place.

QUESTIONER: Is it true that the Greek government asked you to postpone the report? To give out the report?

MR. RICE: The package of documents?

QUESTIONER: Yes. Did they ask you to postpone it?

MR. RICE: As I said, it's an internal processing issue for us now.

QUESTIONER: Is it normal, does it happen often that right after the board approves a disbursement then right after that Madam Lagarde would meet with a finance minister? And would that be related if not with the debt restructuring, would that be related to maybe a government reshuffle? Are you at all concerned about a government reshuffling taking place in the next few days?

MR. RICE: I don't have any comment on the government reshuffle. That's a matter for the Greek government obviously. It's not unusual for management, for the Managing Director and other members of management, to meet with ministers, ministers of finance from time to time. It's not an unusual thing. It's not uncommon.

QUESTIONER: Why didn't you communicate on that? Why -- because if we wouldn't have asked the question, we wouldn't have known about it? Why did you decide to keep it secret?

MR. RICE: Well, it's, you know, again, not uncommon that management would have private meetings with officials from our member governments. And we don't communicate on all those private meetings but since you asked me about it this morning I'm, you know, trying to be transparent about that.

QUESTIONER: But it is very important for us if you can give us a readout of this meeting because even that they decided, Madame Lagarde and Mr. Stournaras to meet, Madam Lagarde called Thomsen and asked him to go to be with her in the meeting. So in my opinion, it is very important meeting.

MR. RICE: Yeah, again, I don't have any details of the contents of the meeting. And again, it's not unusual that members of our management or the Managing Director would meet with minister and meeting with the minister of a particular country. Not unusual that the mission chief would also be in that meeting. Elaine?

QUESTIONER: Just a little while ago the Secretary General of the Greek Revenue Administration, Mr. Theoharis just resigned. I wanted to know if you are informed about this development and if you do, how do you comment on that?

MR. RICE: Just learned about that. Don't have any comment at this stage.

QUESTIONER: Just to switch the subject for a second and we can come back. The ECB today decided to slightly cut rates and I was wondering if you had any comment on that? Do you think that that'll help address some of the deflation issues? Or fears of deflation that you've flagged? Thank you.

MR. RICE: We strongly welcome the very proactive stance taken by the ECB today. And we are encouraged that President Draghi indicated that the ECB would be willing to do more if necessary.

Questioner: And can I ask about a different country? Egypt, now that the government is in place, have you had any more discussions? Have they reached out to you about a loan or have you had any other technical discussions or meetings with Egyptian authorities? Thank you.

MR. RICE: Broadly we stand ready to support Egypt and we look forward to engaging in a dialogue with the authorities on the policy actions and wide ranging structural reforms needed to address the challenges ahead. Maybe I just give you a bit more.

There's an ongoing -- we haven't -- have had and have an ongoing engagement with Egypt. Currently, as you may know our focus is on providing technical assistance on tax, VAT issues and the like. I can tell you a bit more. A technical team was in Cairo April 27th to May the 2nd and as I said, we're ready to support, to engage in the policy dialogue including through an Article IV consultation.

Well, in April during our spring meetings here we agreed with the Egyptian authorities to hold the Article IV consultation sometime after the presidential election. So we're in that mode now of having had the election. So no mission dates set as yet but that was where we had left it.

QUESTIONER: I have a question on the Ukraine. Did you get any guarantees from the new elected president that he will stand by the commitments made by the interim government towards the IMF?

MR. RICE: Yeah, as you might recall Mr. Poroshenko actually has published and shared with our board an open letter supporting the program. So we look forward to working with him and his colleagues on that program and restoring macroeconomic stability in Ukraine.

Questioner: Did you publish that letter or?

MR. RICE: It has been published.

Questioner: I missed it.

MR. RICE: Let me go online a little bit and then I'll come back. There's a question on Sri Lanka and the question is from Matthew Lee and Matthew is asking about "In Sri Lanka, Vice Chairman of the UNP Mr. Lakshman Kiriellahas called on the government to reveal the several subsidiary agreements it had entered into with the IMF which impinged on the budgetary allocations for essential services." That's a quote. So Matthew's asking are there subsidiary agreements with Sri Lanka that have not been disclosed and on that I would like to say that, as you know, Sri Lanka successfully completed its standby arrangement with the IMF in April 2012 and does not currently have a program with the Fund.

The terms and conditions of that standby were clearly outlined in the government's letter of intent that the company, the staff reports. And these were published as usual on the IMF's website. There are no further side agreements just to answer Matthew's question there.

There's a further question and it's on Portugal from LUSA, the Portuguese news agency and it's from Suzana De Paola is asking, has the Portuguese government already sent the intentions letter to formally end the program? Is the IMF's board willing to conclude the last Portuguese program evaluation by the end of June due to the budgetary hole created by the constitutional court decisions? Is the program's conclusion at risk?

And on that one I would say we are discussing the implications of the constitutional court ruling with the Portuguese authorities and once we discuss all the implications, we'll be able to explore the options. Beyond that, I won't speculate on Portugal.

QUESTIONER: Two European officials Mr. Shaüble and Mr. Djiesselbloom recently said that Greece most likely will need a third program and Mr. Schaüble said indirectly that we have no other option, we have no other choice if we want to remain in the Euro Zone. What is your comment on that?

MR. RICE: Well, let me just stepping back and then I'll come to it. But you know, Greece's return to the market recently as we've discussed here was an important milestone and a first step to full market access. We have welcomed that as one of the fundamental objectives of the program which was to restore the market access for Greece. There's certainly still a long way to go before Greece can rely entirely on market financing but this is a first and a very important step.

Regarding another program which your point was, your question, let me remind you that the current IMF program, our program, runs until early 2016. So we have a program in place and this program is the main focus of our work.

Questioner: Can I just ask a follow up about the IMF program?

MR. RICE: In Greece?

QUESTIONER: Yes. I think there seems to be some confusion about whether the program would change once the European part of it, you know, we don’t know what's going to happen after the end of this year. I mean, the IMF program will still have regular reviews, conditions, all the standard things you do, right?

MR. RICE: That's right.

QUESTIONER: There won't be any changes? Okay.

MR. RICE: Well, you know, Anna, as you just mentioned, we have these reviews and the program is a -- it's an evolving thing. That's true not only for Greece but for all countries. I mean, that's why we have the reviews -- to take stock and discuss with the government and we make adjustments as needed and as agreed with the authorities.

QUESTIONER: But they would still have conditions all the regular stuff? MR. RICE: Yeah, I think it's fairly straightforward.

QUESTIONER: Ghana has had some currency problems and also a high deficit and there are signs that they're interested in an IMF program but have they asked for one or have you had any technical discussions with them? Thanks.

MR. RICE: The Ghanaian authorities have not requested a new program from the IMF. Our board discussed the Article IV review for Ghana in early May. The staff report was published last week and it's available on the web site of course. Do you need more on Ghana or are you okay?

QUESTIONER: I mean, are you worried about some of the recent economic developments that would be in the report?

MR. RICE: Well, on that what I'd say is with or without financial assistance from the Fund, we encourage the authorities to embark on a faster and a more ambitious consolidation path to reduce the financing needs of the government and the crowding out of the private sector while creating fiscal space to preserve spending in health and education and to expand cash transfer programs, particularly targeted at the most vulnerable groups.

So again, no request for an IMF program. At this point the government's working on a homegrown strategy to address these economic imbalances. Sandrine?

QUESTIONER: If we can just follow up on Greece?

MR. RICE: Yes.

QUESTIONER: So we found out that the Parliament closed for the summer until September in Greece. Is that a problem for the continuation of the program and some measures that were expected to be taken before the next review?

MR. RICE: We're not, I mean, I'm not anticipating that there are any major obstacles, legislative obstacles on the way in that sense, you know, of the Parliament closing down. We expect a team to briefly visit Athens in July and we expect the mission to conclude after the summer. So maybe that ties to, you know, what you're asking.

QUESTIONER: Mr. Thomsen is going to Greece in July?

MR. RICE: I'll come back to you and confirm on that. A team is going in July, you know, sometimes it's a technical team, as you know, before the full mission. So at the moment the information I have is there will be a team expected in July and with the full mission to conclude, expectation after the summer.

Let me go online and then I'll come back in for one more question if there is one and then we can wrap up. There's a question about the Article IV for Italy. And this is coming from Stefania Spatti who is with America24 and Il Sole and is asking about when will the Italian Article IV be published? The Article IV mission team is in Rome right now and we expect the mission to conclude the middle of this month, couple of weeks. So in the usual way we would have the concluding statement and so on around that time.

There is a question about Argentina from Liliana Franco who is with Ambito and she's asking about the Supreme Court, U.S. Supreme Court case, and asking in case the U.S. Supreme Court does not take up the case of the holdouts against Argentina what will be the implications for current and future sovereign debt restructuring? You know, obviously it's would the court takes up the case is a matter for the U.S. Judiciary authorities. We have said in the past, the Fund remains deeply concerned about the broad systemic implications that the lower court decision could have for the debt restructuring process in general.

Is there another question in the room?

QUESTIONER: I have another question.

MR. RICE: Is this on Greece?

QUESTIONER: It's on Greece again. MR. RICE: Okay.

QUESTIONER: Last Friday the Deputy Managing Director said, "Addressing the very high level of non-performing loans remains an important priority." He also said, "Why there is no acute stability risk? It is critical for the economic recovery of Greece that banks be adequately capitalized up front to recognize losses on the basis of realistic exceptions about loan recovery." This is what he said last Friday.

My question is this. Although the IMF does not detect acute risk as he's saying, it continues to insist that there are risks. And as I understand Mr. Thomsen mentioned it in the report. Does this mean that you do not accept the estimates of bank of Greece for the capital needs of the Greek banks? And Gerry, if you don't have an answer, I want you to take the question and answer it later.

MR. RICE: Okay. All right then, and also I think the package of documents that we talked about at the beginning of the conference should be able to help on this as well. So let's see what that says and then we can follow up as needed, okay? Good?

With that, I'm going to let you go and thank you for coming. And we'll see you in a couple of weeks. Thanks, everybody.