Transcript

Transcript of a Press Briefing by William Murray, Deputy Spokesman, Communications Department, International Monetary Fund

November 13, 2014

Webcast of the press briefing

MR. MURRAY: Hi, good day. I'm William Murray of the Communications Department at the International Monetary Fund. This is one of our regular bi-weekly press briefings. We're embargoed until 10:30 AM Washington time, that's 3:30 PM GMT. As usual, I'm going to run through some travel and housekeeping issues, and then I'm going to take questions from the press gathered here in IMF headquarters and from you watching online, so please submit your questions as soon as possible.

Okay, let's start. As many of you know, Managing Director Christine Lagarde and First Deputy Managing Director David Lipton are currently in Brisbane, Australia, to participate in the G20 Leaders' Summit which will run into Sunday, November 16th. I expect the managing director to have some press availability towards the end of the summit, plus we would be -- we expect to issue a press statement summarizing our views of summit outcomes, stay in touch with media relations and if you have any issues, vis a vis the G20 summit, drop media relations a note and they can follow up for you. After the summit, the managing director will return to Washington to, and among the events that we have here, that she will participate in, is on November 18th, here at headquarters, it's the IMF Second Statistical Forum. This year it's entitled Statistics for Policy Making -- Identifying Macroeconomic and Financial Vulnerabilities. Alan Greenspan, the former Fed Chairman is going to be the keynote speaker at that conference. Full details of the statistical conference are posted on our website. You can see it on the home page there if you're interested in following up and attending.

On December first, the Managing Director will participate in the Wall Street Journal's CEO Council Event, which is here in Washington, brings together numerous Chief Executive Officers of industry. She will discuss current economic issues with Wall Street Journal Editor in Chief Jerry Baker. That's December first here in Washington. Then the Managing Director will travel December second, or from that night actually, but she'll go on to Lima, Peru, for some meetings with the authorities, including President Humala, and she'll also visit the site of our 2015 annual meetings. As many of you probably know, our annual meetings next year will be held in Lima, Peru, and that will be in the autumn.

After Lima, which that visit will wrap up on December third; Managing Director Lagarde will travel to Santiago, Chile for a high level regional conference on Challenges for Securing Growth and Shared Prosperity in Latin America. It's being co-hosted with the Chilean government, President Bachelet will kick off the conference with the managing director, numerous finance ministers, central bank governors, private sector participants and others are participating. In addition, from the IMF, Economic Counselor Olivier Blanchard and Financial Counselor Jose Vinals will be among the panelists. And keynote speaker at that conference will be Columbia University's Jeffrey Sachs. Again, full details on this conference are available on the conference website which is imfsantiago2014.org.

December ninth through eleventh, Managing Director is in Milan, Italy to deliver the address, formal inauguration of the academic year of Bocconi University. Media Relations will be in contact with you regarding advance text and things of that nature.

Shifting to Deputy Managing Director Naoyuki Shinohara, back to November, November 20th, 21st, Deputy Managing Director Shinohara will be traveling to Papua, New Guinea to attend the Southeast Asian Central Bank Governor's Conference. That's in Papua, New Guinea, November 20th, 21st. Ongoing starting today, starting this morning, and will continue through tomorrow, is the Fund's 15th Jacques Polak Annual Research Conference. The theme of this year's conference is Cross-Border Spillovers. The conference obviously is organized by Olivier Blanchard and his team. The idea is it's intended to provide a forum for discussing innovative research and to facilitate exchange of views among researchers and policy makers. The keynote Mundell-Fleming lecture will be delivered by Helene Rey of the London Business School. Again, full details on our website.

Another event that's underway today and will continue into tomorrow is in Stockholm, Sweden, a joint conference with Rick Spank with the IMF, to discuss implementation effectiveness of macroprudential policy. That again is available -- details of that conference are available on Rick Spank's website. You can go there and find further details.

One housekeeping thing to keep in mind, our next briefing will be on December 11th. Prior to that is a holiday here at the IMF, that's November 27th, 28th, the Fund will be on an official holiday. Of course, for media, we have a duty officer system here. Media Relations will be reachable throughout that two day break, or it's really a four day weekend, in essence, starting on November 27th. With that, let me take some questions. We'll start in the room here. Go ahead.

QUESTIONER: Hi, good morning. I have some questions on Greece. When does the mission goes back the 12th, and why haven't you announced yet a date? Are there any conditions for your return?

MR. MURRAY: Okay, so those three questions. Thanks for them. Basically, at this stage, we're discussing with the authorities what is needed from them before the mission can return for further discussions on policies for the completing the review -- the Sixth Review. This would also determine the timeline, these discussions also determine the timeline for the return of the next mission, so quick answer is, I do not have a date for mission return at this time. Right now, but let me just elaborate a little bit for you, because I'm sure you're interested. I mean, our focus at the moment is on the successful completion of the Sixth Review so that Greece can continue to put in place the essential conditions for sustainable growth and job creation and meet its fiscal targets under our program, which, as you probably know, is scheduled to expire in March, 2016. So year after next.

QUESTIONER: So you don't have a timetable for the return, but do you have a timetable for the completion, which we all hope will be successful -- the completion of this review?

MR. MURRAY: Like I said, those discussions are underway too, and as we continue those discussions with the authorities about the policies that we will be reviewing, we'll come up with a timeline. But we don't have a timeline fixed at this moment.

QUESTIONER: A couple of follow up questions from that -- first of all, do you think it's feasible for the review to be concluded before the end of the year, given that the mission has been back to Athens yet, and the second question is, you mentioned you're expecting the authorities to send you what is required from them. What is this, and could it be the 19 point document that was published in my newspaper, Kathimerini earlier this week? Thank you.

MR. MURRAY: Well, just, I'm going to back track. This is really for our audience. The Greek press corps is very familiar with the situation in Greece and the relationship with the Fund, but let me just recap briefly, so for context. The discussions with the authorities are continuing, whether they're physically, the mission is physically in Athens or note, so discussions are continuing, and as you know, the staff team led by Rishi Goyal ended a technical visit to Athens in early October. The managing director subsequently had a meeting with the Greek authorities here in Washington during our annual meetings, the annual meetings that were just concluded here in Washington. And as I mentioned earlier at this stage, we were discussing with the authorities, what is needed from them, before a mission can return for further discussions on policies for the review. But beyond that, I really can't elaborate. Just real quick, we do have a question -- I'm going to -- this is I think I'm going to take my last Greek question, but just for the record, I'll just going to go online here. You have a Greek question too, okay. We'll bunch these a little bit. From Star Channel, any updates -- I'm just going to read the question, so for the record I think I've answered this but -- any updates on when an IMF team will be going back to Athens? Do you think the Greek government has made progress on key issues for successful completion of the upcoming review? Demetrious, I think I've answered that here in the room. Anna, why don't we take a Greek question from you and then, go there.

QUESTIONER: There was, I don't know if you saw my colleague's been asking for an interview with -- sorry -- they had an interview with a Greek official who said that they'd like to have a precautionary line without as much micro-management and conditions.

QUESTIONER: So I was just wondering if you could explain what kind of precautionary lines the IMF has and whether any of them are available without as many conditions.

MR. MURRAY: Yeah. I think I'd bore everybody if I got into all the nitty gritty of the sorts of credit facilities we have and how they're treated. There's a ream of information that we publish on that. But one point I do need to make just for the sake of arguments. The authorities have not made any requests, so they've not made a request for precautionary, so it's an academic question at this state. But there is, for those that are really interested, there's a whole host of information on our web site about what precautionary is, but precautionary versus the normal facilities -- it's how you really -- the bottom line is how you use it. It's really how you use, not what the conditions are or the performance criteria. Can we do one last Greece question? Okay. Thank you.

QUESTIONER: I promise this will be my last one. So what the IMF's role will be, if Greece gets a credit line from Europe, from ASI?

MR. MURRAY: That's totally between the Greeks and the European authorities to work out. I have no say in that and I have no input into that.

QUESTIONER: So what will be the IMF’s role?

QUESTIONER

MR. MURRAY: Well if it's a facility between the Greeks and the Europeans, it's their facility, but we have a loan -- you know we have a program, so, that's the reality.

QUESTIONER: I have a question on Ebola. The U.S. Secretary of Treasury has asked the IMF to write off part of the debts for the three worst affected countries. What is your response to that? Is the IMF willing to do so?

MR. MURRAY: Thanks for the questions Jeremy. We're very glad that some donors have expressed an interest in increasing support for the Ebola affected countries. We are reaching out to all donors to see how we might be able to take this forward, together with our executive board, using all the tools available to us. This would be additional of course, to the $130 million dollars in immediate support from the IMF that was already provided interest free to Guinea, Liberia and Sierra Leone.

QUESTIONER: Would you need to have that approved by the membership, I mean, to write off part of the debt? Does it have to be approved by the member states?

MR. MURRAY: Well as you know, there are cases, before, when the IMF has participated in debt relief efforts, so these are decisions -- these decisions are made according to the merits of a particular case, and this would be approached in the same way. There would be executive board involvement.

I'm going to -- we have a new member of the press corps, and I'll call on him out of -- and then Andrea, I'll come back to you, I promise. He's been raising his hand a couple times, sorry.

QUESTIONER: Can you just provide an update on the mission to the Ukraine? I think that Gerry - the last time he gave a briefing - said that the IMF was waiting perhaps to the formation of a new government. What's the latest on that mission? What types of things are you evaluating?

MR. MURRAY: Okay. Just a reminder, last week, I believe November 7th, the resident representative in Kiev issued a statement announcing the mission, so we had a statement that came out of Kiev on the mission and noted that the mission was scheduled to land on November 11th and work through November 25th. Well the mission is now on. I can confirm that the mission is currently working in Kiev, is discussing with the authorities the current economic situation and progress under the program. Discussions will continue after the new government is formed. Beyond that, you know, that's really where things stand, is once the new government is formed, the mission can have further discussions. But they're on the ground right now doing -- they're having discussions with the authorities.

QUESTIONER: And just a quick follow up to my colleague's question, so just to clarify, so the potential write off of debt to Ebola hit countries -- that is on the table? That is being brought to the executive board, is that correct?

MR. MURRAY: This is back -- this is a question on -- this is a question on Ebola, not Ukraine?

Yeah, that is now under discussion. You need to stay tuned obviously. The G20 Summit in Brisbane is the forum at which a lot of these high level discussions will occur and I would expect that the managing director will have some additional information in the days ahead as these consultations with the donor community continue.

QUESTIONER: A follow-up on Ukraine. Technically, if they form a new government in December and you start policy and discussions with them in December, then the mission needs to come back, make a report, the board needs to consider it. To me it sounds like it basically means that further (inaudible) this year is ruled out. Am I wrong about this?

MR. MURRAY: I don't really have a calculation for you in terms of timing of disbursements and things of that nature, but really right now the mission is on the ground, having active discussions with the authorities. Once the new government is formed, there will be further discussions. I mean, we -- I can't give you a time line. I'm not going to judge.

QUESTIONER: Normally, how much time does it take for a mission to come back and present a report?

MR. MURRAY: You know, the missions on the ground, I'm not intimately familiar with what they're discussing at this very moment in time, but I can't imagine that you know, we work hard and quickly here. But I can't really give you any steer on December versus whatever.

QUESTIONER: Okay, and my other question is on Russia, the Russian Central Bank, is floated the ruble, that I wanted to ask you about, but the time limits and the expected effectiveness of the move.

MR. MURRAY: Okay, thanks. Well, we welcome the decision made by the Central Bank of Russia to let the ruble float, which will underpin the inflation targeting framework, enhance ruble flexibility, will facilitate the adjustment of the economy to external shocks. The oil, as you know, oil accounts for 50 percent of Russia's exports and 45 percent of federal government revenues, so the decline in oil prices has led to an associated depreciation of the ruble, which will also help part of the process, but however, depreciation cannot fully insulate the economy to the effects of lower oil prices, and overall economic growth will likely ease further. In addition, the current account and fiscal position will weaken though buffers remain substantial.

QUESTIONER: Sorry, from what you just mentioned, the growth will likely weaken further. You mean the growth this year, or the growth for 2015, which is already low at 0.5 I think.

MR. MURRAY: We have an, as you know, we publish the G20 Surveillance note overnight and the current forecast for Russian is 0.2 percent growth in 2014, slight uptick in 2015. I had -- we're -- I'm not implying we're revising our numbers, but numbers are always under review.

I just have one more Ebola question online. I'll take that and I'll come back to -- I'm going to come back to Jeremy here in the room. This is from Matthew Lee, Intercity Press. On Ebola, if not answered, what is the IMF's response to the U.S. call for debt forgiveness for three countries, and given the World Bank's estimate of budget shortfalls in Liberia, what is the IMF going -- IMF doing, or will it do? Well Matthew I think I answered that question earlier. I mean, we have -- we've been closely and carefully following developments in West Africa and working actively with the authorities there. One thing I wanted to underline, is that you know, the situation in Guinea, Liberia and Sierra Leone remains precarious. The international effort underway, together with behavioral changes on the part of populations, is making progress in controlling the disease. However, although the incidents in new cases has declined in parts of Liberia, there have been recent flare-ups in previously little affected towns. The IMF staffs' previous projections -- we're assuming that the epidemic would be brought under control by the first quarter of 2015. However it now appears that it could be well into the second half of 2015 before the Ebola outbreak is brought under control in the three affected countries. As a result, the economic outlook for these countries is now worse than it is at the time of the recent additional IMF support, and significant financing gaps are emerging for 2015. Further budget supports through bilateral and multilateral donors, preferably in grant form will be needed. And just to underscore, should the current outbreak be more protracted or spread to more countries within Sub-Saharan Africa, it would have larger spillovers, undermining confidence, investment decisions and trade activities. So the bottom line is we're closely monitoring the situation in the neighboring countries as they step up Ebola preparedness measures and address other fallouts of the epidemic.

QUESTIONER: To follow-up on that. So does it mean that the previous growth estimate that you had for the three countries need to be updated?

MR. MURRAY: We're going to keep an eye on it. Yeah, they'll probably need to be updated.

QUESTIONER: Okay.

MR. MURRAY: But I don't have any fresh numbers for you at this time.

QUESTIONER: And I have another question, I'm sorry. On the twentieth reform, the quarterly governor's reform from the IMF, should this reform be considered now dead and buried now that the Republicans are taking control of both Houses of the Congress? I mean, when does the IMF plan to present a plan B and where do you stand on this issue now?

MR. MURRAY: I certainly hope nothing is dead and buried in the context of IMF governance reform. Management of the IMF from Managing Director Lagarde on down has made it crystal clear that governance reform is necessary and important to the viability of the institution and we're doing whatever we can to promote greater public understanding of the important role that the fund plays in the global economy and in the U.S. economy as well. The U.S. authorities have stated as you know, that they intend to push the government -- the 2010 reforms, and we just have to wait and see. The International Monetary Financial committee, our policy guiding body, gave the United States some time to undertake this effort, and once that effort plays out, we'll see. But right now, and we've indicated that its other options would be pursued, but until this current phase plays out over the course of this year, you can't really draw any firm conclusions, one way or the other. Congress, well aware, mid-term elections last week, Congress just went back into session yesterday. It's a little early to be predictive in terms of what the outcomes are. Congress is reforming itself as well and so they're busy doing things. We'll see what happens, but certainly, we're keen on seeing this governance reform implemented as quickly as possible.

QUESTIONER: I have a follow-up. There are some Republicans, Congressmen, who say that this reform should be -- I mean rejected because it would give more power to countries such as Russia or China. How are you going to convince those people?

MR. MURRAY: You know, that's a characterization that I wouldn't necessarily consider as overly negative and at the same time, as part of the world, the evolution of the world, that's why the Fund existed. It exists to represent 188 member countries, and it represents the interest of the global economy. But in terms of taking on individual positions on Capitol Hill, you should talk to the U.S. Treasury; because that's what they're trying to do right now I understand.

Okay. Now I'll go to the screen again.

QUESTIONER: Just a quick follow-up on what you said on Ebola.

QUESTIONER: I was wondering if you have a ballpark figure as far as the financing needs are concerned. I believe for this year, you said it's going to be about 300 million. And for next year, I'm wondering, since you think it's going to last longer than expected, if it's going to be more than that? And also would the IMF be willing as well to add even more money to the programs it already has with the three countries, to fill part of those financing gaps? Thanks.

MR. MURRAY: I don't have any hard numbers to offer you at the moment. We will at some point in time. It's a little early for that. Like I said earlier, the managing director is working on Ebola related measures at the moment. It's something I expect to play out in some fashion over the course of the next few days. And I'd kind of wait to see what she has to say from Brisbane. Okay, we'll take a question from the floor and then I'll go to the screen.

QUESTIONER: Thank you I just need that clarification.

You said that any further role of the IMF in a new arrangement between the Greeks and the Europeans is totally between them. Does it mean that if they ask you to participate with technical support, you would? Or does it mean that you have no role there?

MR. MURRAY: The relation of the Fund to, in any European arrangement, I'm not going to get into that. That's up to the Europeans to find as their arrangement. Greece is a member of the IMF. We have a program with Greece. That's a long established relationship so that's really all I'm addressing. In terms of what ifs, I don't want to -- I'm not going to go there. It's speculative.

Okay, let me -- I have a question, again from Matthew Lee, on Burkina Faso. On Burkina Faso, does the IMF have any comment or response to the change of government and any impacts on IMF programs or forecasts for the country or its neighbors. Let me -- I'm going to have to dive into my brief here, Matthew. In terms of Burkina Faso, you know there are some issues there with the mission recently, but now the situation is evolving and we are following developments in Burkina Faso closely. As soon as internationally recognized transitional government is in place, we look forward to resuming our discussions with the authorities. Burkina Faso has a long track record of strong performance with programs supported by the IMF. Since the current program provides a signal for broader donor engagement, we anticipate that the transition government is likely to want to continue a program engagement of some sort. Depending upon the authorities' wishes, and the commitments that they are willing to undertake, options might be a one year program supported by the rapid credit facility or possibly continuation of the current ECF supported program. Program implementation capacity will also be an important consideration. That's our latest update on Burkina.

All right, I think we can wrap this up. Is there any other questions we can? Okay, great. So next brief, we're embargoed until 10:30 AM, 3:30 GMT today. Next briefing is here at IMF headquarters on December 11th, and we have a holiday on November 27th, 28th, but I recommend you stay in touch with Media Relations via the duty officer system. Again, thanks for joining us today, and I look forward to seeing you again. Take care.