Transcript

Transcript of a Press Briefing with William Murray, Deputy Spokesman, Communications Department

March 17, 2016

Webcast of the press briefing

MR. MURRAY: Good day. I'm William Murray, Deputy Spokesman for the Communications Department here at the IMF. This is one of our regular press briefings. It's also going to be the last briefing before the Spring Meetings of the IMF and World Bank, which convene here in Washington in the first half of April.

This briefing is embargoed until 10:30 a.m. Washington time, that's 14:30 GMT. A break from some of our usual pattern, this morning we will kick off the briefing with the launch of a paper called "Strengthening the International Monetary System, a Stock Taking". Siddharth Tiwari, the Director of our Strategy, Policy and Review Department, which led the work on this paper, will be briefing you. The paper was circulated last night, you should have it in hand now. The embargo on the paper is also 10:30 a.m. Washington time, 14:30 GMT as is Siddharth's remarks.

With that let me introduce Siddharth Tiwari. Siddharth?

MR. TIWARI: Thank you, Bill. Let me just give you brief remarks on the paper and then I'll take questions. So why now and why is the right time to do it? So 12 months back we had indicated in the Global Policy Agenda that we were going to start this conversation. And the conversation is an everlasting conversation. It goes on for years. Last time we talked about it was in 2011. And since then a lot has happened. We've revamped surveillance, integrated surveillance decision, external sector reports, spillovers, vulnerability exercise, early warning, focus on risk, financial sector surveillance, FSAPS being mandatory for systemic countries. So a lot of change has happened. We've revamped lending facilities, FCL, PLL, the lending tool kit for low income countries revamped, focused on institutional issues, size of the Fund, NAB, quarters, SDR allocation, review of the SDR basket and its expansion, and of course revamped capacity development.

So what are the challenges right now? You'll see in the paper the five challenges are pointed out. One, that all of the imbalances have shrunk post crisis. It's due to demand compression. Two, the central role of one or two reserve currencies implies that they can have significant impact on others, constraining domestic policy choices. Three, economies are much more interconnected and capital flow volatility has become a permanent part of the landscape. Four, quite a bit a bit of work has been done on the financial side, focus now needs to be on the non-financial side. And, five, three currencies, dollar, euro, and the yen will go through their own transitions over a period of time, will lead to volatility which means we need to strengthen or make sure that the safety net is strong.

So with this as background the immediate challenges ahead, and the MD has talked about it many times, is, one, raising post crisis growth in advanced countries. Two, insuring that emerging markets get back on track to a growth level that we've seen in the past. And the key here is that when we were at the epicenter of the crisis there was expectation that there would be a hand off of sorts from emerging markets who remained anchored at that point to advanced economies, and that hand off is not happening. And therefore advanced country growth needs to rise for that handoff to happen. Also the process of convergence, by that I mean living standards in emerging markets rising to the level of advanced economies has probably been delayed by many, many years and that we need to get back on that path because that was the dream of globalization. There has been a historic drop in commodity prices. A large part of the world needs to adjust to that. It also needs to adjust to China's rebalancing to a slower but safer growth. And finally, a asynchronous monetary policy I talked about earlier.

For our own selves we will focus in the near future, in the next year or so, on three things. One, we will look at revisiting our work on capital flows. That was done several years back. And that will be in three phases. One to understand the landscape, how volatile they are, what direction they're going in. So that's understanding the basic facts. Second, seeing how countries have coped with the application of the institutional view. Has it worked, has it helped them, what are the areas where they found it difficult to apply. And this will lead us to a review of the institutional view towards the end of the year. So that's one strand of work. Second strand is strengthening the global financial safety net. Last week we issued the first paper on a stock taking exercise and the global financial safety net and the size of the Fund. It will be discussed by the Board in another week and then we will see where we go from there.

In the global financial safety net the focus is one five levels: One, reserves, two, bilateral agreements, three, regional arrangements, fourth, IMF at the center of the multilateral arrangement, and five, private sector issues like either GDP linked bonds or private sector hedges. And, lastly, we've been asked to look at the role of the SDR and we will come back to it in a couple of months.

There is international focus on this. At the end of March there will be a conference on the international monetary system in Paris which is a follow up to the conference that happened five years back in Nanjing. So this will be Nanjing 2 in Paris. It's also a central part of the G20 agenda, so it's just natural that we look at it here.

I'm going to stop here and take questions if you have.

QUESTIONER: You're talking about liquidity a lot. It seems to me that the IMF was formed on a balance of payments issue. Liquidity is not specifically in the remit. Are you talking about monies for addressing liquidity issues and not balance of payments issues? If that's the case where and how do you see a liquidity crunch happening right now?

And there was a recommendation in the 2011 consideration of such, but that went nowhere. Why? Why didn't that go anywhere?

And, finally, isn't market discipline the issue here? I mean markets have been telling EMs to get their act together as they have told advanced economies. Isn't the issue just getting your act together, really not just plugging the hole?

MR. TIWARI: So the IMF was funded to deal with cross border flows, whether they were initial stages a system of fixed exchange rates or later flexible rates. There are two aspects to them. One is liquidity, the other is balance of payments. And so both issues are well within the remit of the institution. It is true that several suggestions were provided in the 2011 paper. Many of them were not taken forward at that point. Some of them will be revisited because the context is different. And there are some new suggestions that will emerge. At this stage we are in a stock taking stage and we're open to suggestions from the membership on how we take it forward.

QUESTIONER: Market discipline?

MR. TIWARI: In what sense?

QUESTIONER: Well, it seems to me that the best way to address a potential liquidity crunch and market freak outs is by putting your house in order rather than waiting on a contingency situation to plug the hole.

MR. TIWARI: So we have always been of the view that the best safety net is good policies. That's the start of having a safety net where there are good policies, fundamentals are secured, and if there is a shock it can be dealt with either through liquidity or other lines. So, yes, of course, market discipline is important. But on the other hand, when flows overwhelm the domestic financial system they need to be made safer.

QUESTIONER: How much of the vulnerabilities that you talk about in the report can be attributed to the centrality, the dominance of the U.S. dollar in the international monetary system, as well as the centrality of the Fed in the international monetary system? How much of the vulnerabilities would you say are a result of that?

And, secondly, how does one overcome that? What would a system where the Fed and the dollar are just one poll among many, what would a system like that look like?

MR. TIWARI: So the dollar has always been central in the system. If you go back 50 years it was central, it's central today. Over this period of time, especially right now, volatility has increased. So it's not so much the centrality of a currency, but it is related to the asynchronous monetary policy that has been pursued, and pursued for the right reasons. So that's not the issue. Under our framework, under the integrated surveillance decisions, countries (inaudible) domestic objectives and they expect it to do so and the consequences of those objectives are seen as being acceptable under the surveillance framework. I think the issue here is that emerging markets need -- especially innocent bystanders -- need to be protected. And that's something we will focus on.

QUESTIONER: May I follow up on the -- what are the challenges in the paper that you enumerated? And it did seem to me that the previous question was basically the focal point above your presentation, the opening remarks, that the centrality of certain currencies creates at least the conditions, if not being the reason for the volatility, but at least creates the background conditions for the volatility. So am I wrong in understanding that?

MR. TIWARI: So what I was stated was in the front end of the paper. Maybe after this I can point the pages out, where they talk about it. And the centrality of one or two currencies is in the paper itself.

QUESTIONER: We are having a lot of arguments in Brazil. Actually we are facing some very tough political riots and inflation is going over 10 percent, and our central bank is still holding interest rates after some sort of political intervention. So my question is do you think it's important to have independence in central banks? Do you think that this kind of independence could help countries like Brazil that are facing some political challenges right now?

MR. TIWARI: So this is a question for Bill that he will be most happy to tackle in a few minutes.

QUESTIONER: On the size, you all just did your quota increase. You also still have bilateral loans potentially available. Why would you need to consider boosting that again? Firstly.

And isn't there a sort of a theoretical problem here of trying to force the idea of forcing markets to go to another area -- there is a reason why markets choose the dollar, okay, there's a reason why they choose the pound, et cetera. Forcing them to choose an alternate currency or an alternate regime, doesn't that create problems of its own?

MR. TIWARI: Yes. So this paper at no point is suggesting forcing anyone to choose anything, and it will be futile. That countries' markets choose a reserve currency that brings with this the status of full reserve currency. What this paper is talking about is how do you make emerging markets part of a wider system, how do you make the system safer, including for advanced economies. So it's not just emerging markets. And the paper is not either trying to or laying the grounds for a movement from one into another. That's not the paper.

Second thing, on the size, we need to, as under our rules, we need to revisit the issue of the size every five years. So this is a standard exercise that we are mandated to do. There are very few things that we've been absolutely mandated to do and this is one of them.

QUESTIONER: So what's the role of the SDR then? How do you envision the --

MR. TIWARI: So let me unpack it a little bit. So the issue of the size is not right away an issue of boosting fund resources. The first conversation is how large the institution should be and that's a pretty simple conversation in terms of its role in the global economy, in terms of its own size relative to other buffers. Whether there are regional arrangements, reserves. In terms of -- and size in terms of risks that emerge, capital flows. So the first paper is simply a stock-taking paper to see where the size of the Fund stands and there is no presumption of moving in one direction or another. I think we need to go through the conversation.

QUESTIONER: I see here box three, experience with cooperation between the Fund and the European RFAs. And my question is this. The recent crisis I see you write this here. In Europe have evolved close cooperation between the Fund and the European Union institutions. The Fund, as I understand it, played a greater role in the design of the micro framework and the assessment of debt sustainability. Why the Europeans took the lead on structural issues and the assessment of fiscal packets. Do you believe that this coordination has generally resulted in a unified and persistent set of macroeconomic and structural parameters? Because it seems to me and a lot of other people that the Greek problem especially is very problematic because of the cooperation, of this cooperation between the IMF and the Europeans.

MR. TIWARI: So I will take the policy issue. Bill will take the Greece program.

QUESTIONER: I'm asking generally.

MR. TIWARI: Yes, so in general, cooperation works best when people focus on the area of comparative advantage and bring to the table what others, relatively speaking, what others need. And our focus has always been on macro where countries have an independent monetary policy and monetary policy and exchange rates and through the decades we've collaborated with the World Bank and other institutions on structural policy.

Their knowledge is deeper. They have a deeper depth on it and there was a similar arrangement with the European programs and it helped. The Greece question Bill will take.

QUESTIONER: The paper seems to also focus a bit on the inequality that's grown in the period since the last paper. And yesterday we heard the Fed indicate that there's a lack of demand to help the economies grow. With the lower interest rates and the greater capital requirements for the banks, isn't there a greater risk in the nonbank financial sector then? Because doesn't the money go more toward there?

MR. TIWARI: So the paper talks about the rights of the nonbank financial sector and the movement because a lot of work has been done on the financial sector and that's identified as an area for the work. And you're right. It needs to be looked at and that's one of the five areas that are identified.

QUESTIONER: Just a quick follow up. Are there any areas you're going to focus on during the upcoming spring meetings in there?

MR. TIWARI: Yes. So it's -- right now it's a stock-taking paper. I think we want to hear from the membership before we go out with anything. Thanks.

QUESTIONER: Sir, may I ask one last thing? Yes. I'm a political reporter, you know, I'm not an economic and finance reporter. I'm definitely out my depth here in this discussion. So I want to ask you for a very like simple explanation to me of what you are saying in your opening remarks about the dominance of a certain number of currencies and I'm also looking at the paper where it says that the world is moving to being more multi-polar.

In essence, what are you arguing for? That the world needs more currencies, reserve currencies? What's the idea of strengthening the Fund from that side?

MR. TIWARI: So look, the paper will not determine the future technological and other directions the world goes in. In the last 15 years we've seen countries being more interconnected. We have seen the rise of trade and the fall of trade in the last 15 years. We've seen global value chains emerging. We've seen more multi-polarity than had existed in the past.

And the system has to adjust to these changes. And the way the paper is presented it describes the changes and it's the start of a conversation on how this adjustment takes place.

QUESTIONER: But specifically on the currencies, though, could you, I mean, maybe repeat the argument that you made in the beginning but in a very short concise form?

MR. TIWARI: So look, what I would offer you is since you are political and I'm an economist that someone in my department can sit down with you and go through it, through the paper. It is a fairly complicated dense paper. I mean, this topic is difficult to write on and I'd be upfront with you. It's taken us a while. It's not an easy topic to deal with. But so I'd be happy to do it. Thanks.

MR. MURRAY: Sir, thank you very much. Appreciate it. Take care.

As follow up because it is -- there's a lot -- this paper does cover a lot of ground. There's going to be a whole series of papers coming out over the -- in the coming months. I recommend if you have today any follow up particularly for the viewers online, send an email to Raphael Anspach in media relations. You could send it to media@imf.org, to Raphael's attention, Raphael Anspach. And he can follow up with Siddarth's department.

And we're always available to take additional questions on this important subject. The international monetary system is something that we're going to see play out in terms of the public debate and the public policy debate over the next few years if not longer.

With that, I want to thank Siddarth Tiwari, again, for taking this time. And I'm going to now get into the regular; I'll call it the regular program for my department's biweekly press briefings.

I'm going to do two things. I'm going to run through the management travel, public events plans and then, I'm going to just run through briefly the schedule of basically press events related to the spring meetings here in Washington in April.

As many of you know, the Managing Director Christine Lagarde is currently in Vietnam. She has an address earlier today. I believe that's been published. After Vietnam, that's until tomorrow, she'll travel to Beijing on March 20th, 21st to attend the Annual China Development Forum. Ms. Lagarde will also address the forum on international monetary system matters. So there will be a speech, media relations will be in contact with you regarding details of advanced embargoed access if there is any to her address in Beijing at the China Development Forum.

As Siddarth mentioned briefly during his segment of this event, the Managing Director will be participating in the so-called Nanjing Two Conference in Paris. That's going to be on March 31st. It's being co-hosted by the French and Chinese finance ministries. I recommend you contact those ministries, particularly the French Ministry where -- French, excuse me, Treasury which will be hosting the Nanjing Two Conference on March 31st.

On April 5th, the Managing Director will be in Frankfurt. Frankfurt, and I'll elaborate on Frankfurt shortly because in the context of the April 5th event in Frankfurt and the context of spring meetings events. On April 7th and 8th, the Managing Director will be in New York to participate in this year's Women in the World Summit. And separately she'll receive the global leadership award from Columbia University. That's April 7th and 8th.

Shifting now to deputy managing directors. On March 23rd and 24th, Deputy Managing Director Min Zhu will be in China to participate in the Boao Forum in Haiku and we'll have more details again through media relations on those -- his participation in this forum. On March 22nd at noon here in Washington, noon midday Washington, DMD Mitsuhiro Furusawa and Masood Ahmed who's the Director of our Middle East and Central Asia Department will participate in a panel discussion at Johns Hopkins School for Advanced International Studies.

They will present MCD's latest paper called “long-term growth prospects in the Middle East and Central Asia”. That paper will be made available to you under embargo on Monday, March 21st. Again, Deputy Managing Director Furusawa will then travel to Asia. On April 2nd and 3^rd, he'll attend the ASEAN finance ministers and central bank governors meeting in Vientiane, Laos and then, he'll travel on to Tokyo to preside over the opening of the IMF Japan high level tax conference for Asian countries. That'll be in Tokyo on April 6th. Again, there'll be communications from the media relations division as to details.

QUESTIONER: First of all, am I understand that the -- one of the deputy managing directors will be reciting economic policy in Haiku?

MR. MURRAY: Oh, no, no. It's the location of the -- it's a city in China. Very good. Although we'll try. We should see what happens, yes, okay.

QUESTIONER: Because I will be very impressed. I'll definitely be retweeting that.

MR. MURRAY: I think that's for -- we'll have a contest on that. Yes, I think that would be good, thanks.

Let's get back to the events. We'll have a public calendar on the Web site for the spring meetings but just to run through and help you mark your calendar items. March 31st here in Washington at the Peterson Institute, Vitor Gaspar who's the Director of our Fiscal Affairs Department will present findings of the Analytical Chapter of the upcoming Fiscal Monitor.

The Chapter will analyze how fiscal stabilization policies and well-designed fiscal incentives encourage innovation and promote productivity growth. Vitor's presentation will be hosted by Adam Posen who's the President of Peterson and it will include a panel discussion with Jason Furman who's the Chairman of the White House Council of Economic Advisors and also on the panel is Simon Johnson of MIT at the Peterson and one of our former chief, IMF chief economists.

Media will be invited. The Chapter will be provided to you, the press, under embargo. Again, media relations will be in touch on that. That's the Analytic Chapter of the Fiscal Monitor.

April 4th, 9:30, again, Washington time, the Monetary and Capital Markets Department will brief on the analytic chapters of the Global Financial Sector Report. Again, that'll be here at IMF headquarters. Those Chapters are related -- two Chapters are related to financial market spillovers from emerging market countries and on trends and risks in the insurance sector.

Now I had mentioned earlier about the Managing Director in Frankfurt. On April 5th, again, the Managing Director will be on Frankfurt. She'll deliver what we consider the curtain raiser speech for the Spring Meetings here in Washington at Goethe University. I think you've received the media advisory on that event. If you have not, again, please ask media relations for the event details.

Later on April 5th, the MD will travel from Frankfurt to Berlin to participate in the Annual International Financial Institutions meeting that's hosted by German Chancellor Merkel, Jim Yong Kim of the World Bank, Roberto Azevedo of the WTO, Guy Ryder of the International Labor Organization, Angel Gurria of the OECD are also participants and there will be a joint concluding press conference that’s on April 5^th in Berlin.

April 6^th, 9:30 a.m. here in Washington the Research Department will launch the Analytical Chapters of the World Economic Outlook. Interesting chapters as well. These Chapters cover capital flows to emerging markets and another Chapter on structural reforms and the optimal sequencing of those reforms.

Then we get into the bulk of the Spring Meetings week which is on April 12^th at 9:00 a.m. Our Chief Economist Maury Obstfeld will unveil Chapter one of the spring 2016 WEO. Those are the latest IMF forecast updates from obviously the January forecast and then in more details the October 2015 findings.

April 13^th, 8:30 a.m. Washington time Financial Counselor and Monetary Capital Markets Director, Jose Vinals, presents the main Chapter of the Spring 2016 Global Financial Sector Report. That’s again here at headquarters. On the same day Vitor Gaspar briefs you on the Fiscal Monitor.

Lastly, the MD’s press conference, the pre-IMFC press conference is on Thursday, April 14^th. That will be live and it will include the launch of our latest Global Policy Agenda. The Global Policy Agenda which we update every six months will be given to you under embargo.

With that it covers the events. I’ll go back to your questions, go ahead.

QUESTIONER: Back to the Argentine question. To what extent does the holdout agreement with Argentina – you know what I’m trying to say.

MR. MURRAY: You’re talking about the debt –

QUESTIONER: Yeah, raised concerns among the IMF that it could create an incentive for other holdouts to negotiate and create a problem systemically. At the very least does this not accelerate the need for introducing the new CAC agreements internationally?

MR. MURRAY: All right, well, In terms of holdouts let me just repeat what we’ve said already about it and I’ll become a little more specific. We’ve been very encouraged by the agreement between Argentina and a number of its creditors, the fact it’s been reached. This is an important step forward towards allowing Argentina to return to financial markets and restore its financial position, so it’s good for Argentina.

On the specifics of what you were saying, as you guys probably know if you’ve been following the IMF closely in the last few years, we’ve introduced a series of measures to enhance the sovereign debt markets. The collective action clauses that have been formally endorsed by our executive board are an important part of that. Not all sovereign debt is covered by these new collective action clauses but it’s an important step forward and certainly we’re seeing more and more countries subscribe to these legal conditions.

Beyond that I think it’s a little early to speculate. I’ve seen speculation about the potential ramifications of this holdout agreement but I think it’s a little early to be drawing any kind of firm conclusions beyond, you know, that we have to change regimes any further. I think we want to see collective action clauses that were adopted or introduced last year become more widespread and they certainly are so the trend is positive. As long as that continues we have to be optimistic about that.

QUESTIONER: But forgive me for taking the time, but by your answer are you telling me that the IMF has absolutely no concerns about the potential systemic implications of this deal? The IMF is at the center, as Siddharth said, of the international monetary system. This deal potentially has systemic implications.

MR. MURRAY: Let me be clear. We welcome the agreement that is being reached with Argentina’s creditors. The first step is that they can reengage with the global financial markets. It’s really important for Argentina to be engaged back in these markets. So, number one. Systemic risks exist broadly and that’s what our job is, to monitor systemic risk. If we see them develop we’ll certainly bring them to your attention, but right now I’m not prepared to red flag this particular development as the heightened risk that you’re implying it is. I can’t go that far.

QUESTIONER: I wanted to know, I mean, it seems that the super profits made by Singer, Mr. Dardenall, it’s impossible not to believe that others aren’t going to make the same kind of purchases with interests that are not covered by CAC. So I just wonder: can you address what the motivation for other investors are? And also if there is any progress of the IMF on this idea of a sovereign debt adjustment facility or something short of a bankruptcy regime to deal with future cases like this.

MR. MURRAY: I’m really not prepared to get into market behavior, what they’ll do. I mean, the secondary market trading and sovereign debt, I don’t have any briefing on that. On the CACs, we’re talking about new debt issuance which you have to presume Argentina will now be able to do because it’s normalizing its relationship with the financial market, so I would assume it’s sort of a moot point of context for Argentina. Broadly speaking, I can’t go there.

In terms of your second question, our membership right now has not endorsed a statutory approach to resolving sovereign debt issues. That’s what this SDRM mechanism essentially would be. So we’re not there with our membership. And it’s a pretty big membership. You have to obviously monitor where the public policy debate evolves but right now I’m not aware of any initiative in the context of the IMF that would lead us immediately to a statutory approach. I haven’t seen that.

QUESTIONER: Two questions. One on Brazil and one on the FED. First of all, on Brazil there seems to be some serious political problems there right now. What is the Fund’s assessment of the economic and financial risks both to Brazil and more broadly to the Latin American region? And secondly on the FED, Chair Yellen yesterday put the FED on a gentler course of easing over the coming months. What is the Fund’s view of the FED’s decision on that, and in particular what’s the Fund’s view on their assessment of the global risks to the U.S.?

MR. MURRAY: In terms of assessment of global risks and stuff like that I’d kind of prefer to wait until Maury Obstfeld and company are out there to give our fresh take on that, but let me talk about the FED first and then I’ll get to Brazil. Certainly we’ve been counseling publically for some time now a more gradual approach to normalization of monetary policy in the United States and the tightening cycle. So what Chairman Yellen said yesterday is generally in line with our thinking.

On Brazil I’ll touch a little bit on some of the things that were raised earlier. I’m not going to get into current events in the political arena in Brazil, but let me tell you we obviously are following developments there closely. But it’s a matter of policy that we don’t really dive into political developments in our member countries particularly at this juncture. But let me tell you what we think about – I’ll repeat what we’ve basically been saying about Brazil. In terms of economic policies and priorities we’ve said before that Brazil should strengthen the macroeconomic framework that has served it well in the past to turn around confidence and to boost investment. So they have to turn around confidence and boost investment. This includes policies regarding inflation targeting, exchange rate flexibility, and fiscal responsibility. These are good policies. In this regard Minister Barbosa’s commitment to fiscal consolidation and Social Security reform is important, and delivering on these commitments is essential. In terms of the outlook for Brazil, again, Maury will be able to get into more detail about it and its global ramifications later, but clearly Brazil is facing a difficult situation with another year of contraction expected for 2016 and the key for Brazil is to strengthen the macroeconomic framework that has served it well.

We’ll keep to Brazil right now. The last question on Brazil.

QUESTIONER: You were saying something about strengthening the framework in Brazil. Could that include independence of central banks or at least discuss this issue in Brazil because political riots are interfering a lot in terms of our monetary police so.

MR. MURRAY: Let me give you a broad view of central banks in general not just for Brazil, and then I’ll touch on Brazil very briefly.

Our general mantra is that central bank independence is good, that a transparent central bank, one that publishes data, et cetera, is accountable publically, leads to good policies that I think Siddarth talked about actually in his segment of this briefing. So an independent central bank that’s transparent, accountable, and functions appropriately as a result of that, the salutary effects of that tend to be on the positive side for countries, generally speaking.

As far as Brazil goes, we in our 2015 Article IV Report, there is a section that was specific to our views on Brazil’s central bank independence. I don’t have it rote but I would refer you and others that are interested in this to go back and look at the 2015 Article IV staff report on Brazil. There was a section specifically on our views about central banking independence in Brazil.

You have another Brazil question?

QUESTIONER: Just to clarify, have there been any discussions over the phone or in person about requests for technical or financial assistance from Brazil and are there any missions planned that are non-Article IV?

MR. MURRAY: The short answer is no on financing, I’m not aware of any request for financing. We are in the preparatory process of the 2016 Article IV review right now, we’re in the throes of that. And we have constant contact. And there has been Brazil technical assistance for years, so there may be TA missions on the ground and stuff like that that I’m not aware of but I’m not aware of any request for IMF financing.

Sir?

QUESTIONER: Thank you. I have a question not about Brazil but about Ukraine and U.S. Assistant Secretary of State, Victoria Nuland. She was testifying on Tuesday in the Senate about the current situation in Ukraine and Ukraine economy. And she was really skeptical about whether United States or IMF are going to give more money to Ukraine until the political crisis is resolved. So could you please tell me what is the current situation in IMF given the third tranche to Ukraine– because there is a lot of people in Ukraine who are really waiting for this money.

MR. MURRAY: I’m not intimately familiar with Assistant Secretary Nuland’s comments. I’m aware that she had some remarks on the Hill or something like that but, I mean, that doesn’t factor in what I’ve got to say. So let me give you our current thinking on that. I think you’ve heard this before, it hasn’t really changed. We’ll need to have more clarity about the status of the government and the conditions for us to be able to engage on policies to strengthen and transform the Ukrainian economy and to pave the way for the completion of the second review. Once there is more clarity about the status of the government, we’ll look forward to engage with the authorities on policies to strengthen and transform Ukraine, pave the way for the completion of the second review of the IMF program.

QUESTIONER: Just to follow up. The question has already has been asked but just to check. It’s the second review. You are not thinking again of combining reviews?

MR. MURRAY: I don’t have any guidance on that. QUESTIONER: I just to follow up. Is there any deadline if it doesn’t work in April we will stop our work with Ukraine if it doesn’t work in, I don’t know, May?

MR. MURRAY: We never stop work with any country unless there is something that prevents us from physically working in the country.

QUESTIONER: And may I ask a parochial question on Russia? Although copiously it’s not something that IMF is directly involved in. In a way, it's a broader question. The Russians are trying to enter the markets again for borrowing with a bond issue, and my understanding is that the U.S. do not look favorably on them because the U.S. seems to be urging the American banks not to take out the offer, not to participate in the issuance. Does the IMF have a general view of how helpful or unhelpful such attitudes may be?

MR. MURRAY: Thanks. I don't have any specific guidance on this particular topic. I'm happy to follow up.

QUESTIONER: I'm happy that there's no interest on Greece today. (Laughter) So, can we go to, please, first question.

MR. MURRAY: Sure.

QUESTIONER: I wanted to start with a usual, what is the status of the negotiations in Athens? There are a lot of reports that there is a zero preference, and that Mrs. Vasquez is coming tomorrow to Washington. The second question, what are the difficult issues, and what is the timeline that you have for the completion of this review?

MR. MURRAY: Okay. Really, let me give you what we are prepared to say today, and keep at that. You're correct -- there is a mission for those who are not as familiar with Greece as Michael is and others. There is a mission on the ground currently in Athens. We have nothing fresh to offer at the moment on Greece. This mission is focused on discussing with the authorities and our program partners, the microeconomic policies that could pave the way for a comprehensive program that the IMF could support. As we have said before, a strong set of policies on the part of the authorities, together with debt relief from European partners are the essential ingredients of a program that we could support. We'll communicate outcomes of the mission in due course. As far as the timing of the mission -- the current mission -- we'll get back to you, obviously, when things develop, but I don't have any guidance on that.

QUESTIONER: I asked this question again, but I never received an answer. What is the role of the Fund in these negotiations? There are a lot of these accusations that you are blocking the proposals by the Greek Government. Are you a participant? Are you just on the sidelines? What is the role, the actual role?

MR. MURRAY: Greece is a member of the IMF. We are in discussions with the Greeks. I don't have anything beyond that.

QUESTIONER: Do you think that the IMF would be more realistic for the reappearance to lower the physical targets that were attached to the last bailout. This primary service. And I have another question on the U.S primaries, actually.

MR. MURRAY: Okay, let's finish on Greece, and then I'll take up your question on U.S. -- the political process in the U.S. and trade. I can't get into any details about the primary surplus, where the mission is on the ground. I've been asked, specifically by the mission, to stay out of that level of detail. This is what they do when the go to Athens -- they talk about these issues. These are important issues and things -- as we've said before -- for us to do a program, things have to add up. That includes debt relief that includes a number of other commitments and implementation by the Greek authority. So, things have to add up. What you just cited is part of the calculus that goes into a program. Can't go beyond it.
QUESTIONER: The Finance Minister of France expects the debt negotiations to start at the spring meetings. Do you have any idea what is going to happen, or can you take this question, answer it later?

MR. MURRAY: If it is happening, we'll follow up with you on it. We'll see what happens in the spring meetings, if indeed that's the case. I don't have any guidance on timing of the negotiations. You know, that's between the Europeans and the Greeks, obviously. So, you are a good -- you're in as good a place as any to find out what's going on there. Let me end here.

QUESTIONER: Free trade?

MR. MURRAY: On the trade negotiations, you know, we're -- the trade rhetoric that you're hearing --I don't really have an institutional position on this. We are supportive of freer trade and rational trade arrangements. We are also in favor of multilateral trade arrangements. So, of course, we would be concerned about anything that would undermine multilateral trade arrangements, but beyond that, I'm not going to get into -- and institutionally, we would not get into a specific politician's commentary.

Let me get to Zimbabwe here, because I do have some guidance. What's your question, specifically?

QUESTIONER: They've announced that they are going to get a loan in the third quarter of up to $984 million. So, a lot of people, human rights groups, other -- a lot of -- a variety of grounds are curious about it.

MR. MURRAY: Okay, thanks. So, basically your question is are we about to give Zimbabwe a loan? Is that -- that's your question?

QUESTIONER: Right, that is the question.

MR. MURRAY: Thanks. Okay, so we had a mission -- a recent mission to Zimbabwe -- February that left on March 11th. It was aimed at conducting the third and final review of what we call staff monitored program; and also to conduct a 2016 Article IV consultation. So, that mission was on the ground from February 24th through March 11th. The Staff Monitor Program constituted a first step towards establishing a policy record of accomplishment with a view to normalizing relations with creditors. The discussions covered recent economic developments and near and medium-term outlook -- economic outlook and risks for Zimbabwe. Also, covered implementation of the policies and reforms under the Staff Monitor Program, and the near and medium-term policies that could help remove hurdles to growth. The IMF also continues to provide targeted technical assistance to Zimbabwe.

In terms of financing, Zimbabwe cannot have a financial arrangement with the IMF because it has accumulated arrears in payments to the Poverty Reduction and Growth Trust. That Trust is the pool of money that is created by donors and others to help the Fund lend money at a very, very low cost to the poorest countries in the world. The Zimbabwe authorities plan to clear their arrears to this Trust soon. There was a meeting in Lima – during our Annual Meetings in Peru -- last year, and Zimbabwe received strong support from creditors and development partners for its strategy to clear arrears to the international financial institutions. In addition to this support, successful completion of the IMF Staff Monitored program, and a deepening of ongoing reforms, has set the stage for advancing the re-engaging process with both multilateral and bilateral creditors. However, it's important that the step towards normalizing relations with the international financial community is underway, but it also means that there has to be successful resolutions to Zimbabwe's external payment arrears. Full Stop.

QUESTIONER: On Ukraine, just to clarify one question.

MR. MURRAY: I'd be happy to clarify.

QUESTIONER: My colleague was asking whether there was a timeline, deadline, and --

MR. MURRAY: I don't have a timeline to report.

QUESTIONER: you're saying that, look, we were always engaged, we never end. But, in fact, the IMF did end its two previous programs with Ukraine because of the failure of the government to deliver; and in the case of the Greek program, it did, in fact, end its last bailout with Greece, and has only started a new program because that bailout -- that program ended. So, just to be more precise, there is at some point a point at which the IMF ends its financing with a member country.

MR. MURRAY: Well, programs have a shelf life, but beyond that we don't have any deadlines. Programs are themselves. We don't formally end programs. We don't say in the middle of that timeline, end, over. You know, it doesn't work that way.

Thank you, everyone. Again, look forward to seeing most of you in the 2016 Spring Meetings of the IMF and World Bank here in Washington, DC in April.

Thanks, again.