Transcript of a Press Briefing by Caroline Atkinson, Director, External Relations Department International Monetary Fund

January 22, 2010

International Monetary Fund
Washington, D.C.
Thursday, January 21, 2010
Webcast of the press conference Webcast

MS. ATKINSON: Good morning. We are in our new Multimedia Studio, so please excuse any glitches that we may have. I hope that this will lead to a big improvement in our accessibility and in your ability to pose questions online.

Before I take your questions, I wanted to underscore our concern which I know we share with everybody around the world about the situation in Haiti.

As you know, we have announced and we hope to have approved soon a loan, financing for Haiti emergency assistance, that will be available as soon as our board approves it, and we plan to have that board date next Wednesday, January 27.

We of course along with everybody else will be working to try to get needed cash and resources to Haiti as soon as possible and to do what we can to help in this terrible tragedy. This is of course a major issue for the international community and we will just be playing our part with other donors, financial institutions and so on.

At this point it's still very difficult to make any assessment of the scale of the disaster. We had had some numbers about how bad the impact had been of the previous hurricane, but it seems that especially with the aftershock earthquake yesterday that the damage may be much more and it will be urgent to understand and go and find out the reconstruction costs. As I said, the human costs are what we along with everybody else are most concerned about right now and rapid financial support we believe is an important element of trying to address those human costs as to what we can do.

Turning to more routine matters, next Tuesday, January 26, it's been confirmed that we will be presenting the update of our WEO and GFSR with Olivier Blanchard and Jose Viñals. They will be giving a press conference here at 9:30 in the morning and the documents will be released under embargo through our Press Center at 7:30 a.m. Washington time. We will also be uploading a video clip from the WEO and GFSR updates on the MMBC and we are hoping that we will have broadcast-quality video clips to post on News Market where they can be accessed free of charge.

On other matters, Managing Director Dominique Strauss-Kahn who is just traveling back from Asia now will be going next week to Davos for the World Economic Forum, and he will be joined there by Mr. John Lipsky, the First Deputy Managing Director. After that the Managing Director plans to deliver the keynote speech at the Herzliya Conference in Tel Aviv on January 31, and our Press Office will be in touch with you regarding his prepared remarks.

Now if I can turn to questions from those of you in the room or those online.

QUESTIONER: I'm going to come back to Haiti for a second. The board meeting is going to be happening next week and I wondering, you've seen statements out by antipoverty groups regarding the fact that this is a $100 million loan and not a grant. There seemed to be some indication yesterday from what Mr. Strauss-Kahn say saying that it seemed that the Fund is pursuing certain conditions or lesser conditions on this loan. Can you see at all this bring a grant at all or does it remain a loan? I gather than under this facility that they don't pay interest until 2011. Can you please clarify that?

MS. ATKINSON: Yes. It is indeed an interest-free loan for at least the first 2 years. This is part of the reform to our facilities for low-income countries that was announced and agreed last year but finally became effective actually earlier this month with all of the votes finally gathered. So the new financing for Haiti will be at no cost for at least 2 years. The Managing Director has indicated that we believe this is the first part of an emergency response. This is what the IMF can do. It's important obviously that people have food, medical supplies, water, security, but also that they have access to cash from banks, that the banking system can get revived even in a rudimentary way, and that the country has foreign exchange reserves to buy needed imports, and that's the part that the IMF can help with very quickly. As you know, we're able to disburse very quickly.

Looking down the road, this is obviously an extraordinary situation. The Managing Director talked about the need for maybe assistance thinking of it in terms of a Marshall Plan to help rebuild what is a devastated country and economy. Looking further down the road, Haiti still does have some outstanding debts, very small to the IMF at this point, but to some other bilateral creditors including Venezuela, for example, and I'm sure governments will be wanting to do what they can in the light of a comprehensive debt rescheduling, but we see that as down the road a medium-term issue. What we are able to do right now is to provide money that doesn't require Haiti to pay any debt service. And perhaps if I can just clarify, Haiti is paying no debt service to the Fund right now. We're not collecting anything other than small commission charges or something, because I have heard some inaccurate reports. So that this new financing and the existing financing, Haiti doesn't owe us any interest on, and it would only be a matter for 2012 when under our normal rules a very low interest rate would become available.

I have a question online from Daryna Krasnolutska at Bloomberg about Ukraine. She asks, Can you please comment on how you see relations developing with Ukraine if Viktor Yanukovich wins the second round of presidential elections? And she notes that he said today he would develop a program that would suit both the IMF and Ukraine.

As you know, we work with member countries and not with particular governments. We stand ready, I believe we've probably said before, to continue to discuss with Ukraine as with any other country on the continuation and the next issues with their program. This is obviously welcomed news that one of the candidates is expressing his interest in developing a fruitful relationship with us.

QUESTIONER: Anatolia News Agency from Turkey. Is there any update you could give us on the meetings between the officials from Turkey and the IMF about a possible agreement between the IMF and Turkey? When do you expect these meetings will be finalized and the conditions would be ready for any agreement? Can you give us an update about that? Thank you.

MS. ATKINSON: Thank you very much. I actually have a question online as well that is similar that notes that the Deputy Prime Minister Ali Babacan had said that Turkey was willing to make a new program with the IMF for 2 years. I think he said a number of things actually that were reported and then asked is there any progress. What I'd like to repeat is just that we've been discussions with Turkey. We are having close and productive discussions with Turkey. These are about what would be the key elements of a program. The situation remains as it was, that if the authorities wish to request a program, we can go and have further discussions. I know I've been saying similar things for a long time now.

QUESTIONER: Nicoletta Nencioli, ANSA News Agency. I'll bring you back for a second to Haiti just to have everything very clear again. The board is going to approve an interest free for 2 years' loan on the 27th? Number one. And number two, about the Marshall Plan that Mr. Strauss-Kahn has been mentioning since yesterday. Is the IMF starting to act as a facilitator about this talking with other governments, whatever you can articulate?

MS. ATKINSON: Thank you. On your first point, I can't prejudge whether or not the board will approve a loan, but we expect a financing request to go to our Executive Board on next Wednesday, January 27. That will involve no interest. It will be interest free if approved for 2 years until the end of 2011, so interest would only become due in 2012 under current rules and at that point it would still be a very low interest rate of .5 percent.

What the Managing Director has said is that given the devastation in Haiti and the extraordinary international mobilization that is going on, he expects that the international community will come together to think of the broader reconstruction needs and Haiti's financing needs going forward which will likely or may well include some comprehensive treatment of debt. And when he referred to Marshall Plan, you know he's on a plane today, but I know that he has been very focused on Haiti and I'm sure he's been talking to others involved on this.

QUESTIONER: To come back to Turkey, I was wondering if the IMF has received any request yet from the government for an official negotiating mission to go to Ankara? The other question is currently discussions are around a technical nature in Turkey. Can you clarify?

MS. ATKINSON: I think the situation with Turkey is pretty similar to the way it's been for a long time which is that we have discussions, we have good and close and productive working relations. These discussions continue. Sometimes we have not had a mission fielded nor requested.

QUESTIONER: This is about Greece. Do you have any update for us on Greece and the technical mission there? Have they ended? Do you expect a statement? What have you found? Is there any chance that Greece could ask for some financing from the IMF? Could that be done with the E.U. or without the E.U.?

MS. ATKINSON: How many questions here?

QUESTIONER: There are a lot of questions around Turkey. Can you give us what you have?

MS. ATKINSON: Greece, I think.

QUESTIONER: I'm sorry. Greece as well.

QUESTIONER: On Greece, the mission has concluded. I believe they're flying back now or will be shortly, the mission that began on January 12. I don't think we're expecting a statement. This was a technical mission with technical experts. They have talked to the Greek authorities really focusing on what are the technical measures where we can give advice about how the authorities can best implement the stabilization program that they have announced which is of course between them and the E.U. That does not concern financial assistance from the IMF. I think we've said plenty about that before. We don't expect a request for financial assistance from Greece. We do believe that it's important that they have these targets for deficit reduction and it's important obviously for them to work out how best to have those targets implemented and we will certainly be helping them on a technical basis as part of our normal surveillance to carry out that implementation, and as you know, we have a lot of expertise on these various matters. So I expect those technical discussions will continue over the coming period, but right now the team is on its way back.

Are there other questions? I have a question online about Iceland. Has a date been set for the conclusion of the second review of the IMF economic program with Iceland? Icelandic authorities and the IMF mission reached a staff-level agreement on the second review in mid-December, and this is from Ollie—in Iceland. On that, that situation has not changed. We have made clear that there's been a lot of agreement as in the question at the staff level about the elements of a program and most of those are falling into place. There is a question of how the program is financed and that is something which is under discussion with the Icelandic authorities.

Then on Romania, we have a question that asks that the mission chief Jeffrey Franks in Romania, this is from Matthew Lee, has been quoted as saying that he has reasons to believe that the disbursement will go ahead in an article that said the IMF required the formation of a new government. Can I elaborate? Yes. We have a mission on the ground now headed by Mr. Franks in Romania that is discussing negotiating on the second and third reviews of the program in Romania and is normal practice with a mission on the ground, I'm not going to comment on that. As soon as we do know any more, we will of course let you know.

QUESTIONER: I'm going to come back to Iceland. The IMF said recently that it would be in talks not only with the Icelandic authorities but also with financing partners on the money for Iceland. Have those talks taken place? Is a mission going to Iceland on that? The second half of that question is also the IMF has said that Icesave is not a condition of the program, but in everything that's been said it seems that the financing for Icesave is a condition of that financing. So the question is, how does the IMF think that this should move forward? Does it need to be resolved? Is it possible that it can be resolved?

MS. ATKINSON: First of all, anything is possible. I think we have been clear that the Icesave agreement is not a condition of the program. For Iceland as with any other country, before we lend money we need to be assured that the program is fully financed and that will something that we have to assure in the case of Iceland, and discussions are continuing to see about that assurance.

QUESTIONER: So the mission hasn't gone?

MS. ATKINSON: There is not a mission currently planned. We can get back to you on that. I am not aware of there being a mission that's about to go, but let me confirm that for you, Leslie, because I'm not on—although I'm supposed to be for this.

I am being told that we have no new questions on different topics online and so I would like to thank you all very much and look forward to seeing you again in 2 weeks' time or in fact as I said the next occasion for you to come in here will be with Olivier Blanchard and Jose Viñals next Tuesday the 26th. Thank you very much.


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