Transcript of a Press Briefing by David Hawley, Senior Advisor, External Relations Department

February 18, 2010

Washington, D.C.
Thursday, February 18, 2010
Webcast of the press conference Webcast

MR. HAWLEY: Good morning. I'm David Hawley, Senior Adviser in the External Relations Department for the IMF, and welcome to another of our regular press briefings. As usual, to both the journalists in the room and on the Online Media Briefing Center, the briefing is under embargo until 10:30 Washington time and that's 1530 GMT.

Before turning to questions, I'll just go through as usual through a couple of usual housekeeping items. This afternoon, a surveillance note to the G-7, that is to say, a document prepared by the Fund's staff input for last week's G-7 meeting in Iqaluit, is going to be published on the IMF's website. I'm just flagging this to you as a courtesy. The note doesn't contain fresh growth forecasts and they mirror those in the recently published WEO update.

On February 19, that's tomorrow, we will be publishing a Staff Policy Note entitled "Capital Inflows: the Role of Controls." This will be released at midnight tonight or 500 GMT. We will be briefing on it tomorrow morning and you will receive embargoed copies this afternoon on the Online Media Briefing Center. You can follow-up with Media Relations for details on that. The briefing will be led by Jonathan Ostry, Deputy Director of the Research Department.

Another paper that we've publishing on February 23 next week will be a staff paper on “existing from crisis intervention policies.” Media Relations will follow-up with details on the release schedules.

Finally, on Monday, February 22, in Lahore, Pakistan, the IMF will launch the IMF Youth Dialogue, a series of roundtable discussions with university students across the Middle East, Pakistan and North Africa. The objective of this initiative is to discuss with the next generation of leaders what economic policy measures are needed to secure sustainable economic growth and to address youth and employment in these countries. We are going to hold roundtable discussions in Jordan, Lebanon, Egypt, Saudi Arabia, Morocco and Tunisia as well with the participation of IMF staff. With those preliminaries, I'm open for questions.

QUESTIONER: Do you have any update for us on Ukraine, if the program is resuming after the election or are you waiting for the election result dispute to be cleared?

MR. HAWLEY: I can say only that the Fund stands ready to discuss with the authorities policy priorities and prospects for 2010.

QUESTIONER: So that the Fund has not since the election been in touch with the Ukrainian authorities? Is that because you feel that they're not ready for that yet?

MR. HAWLEY: We've not met with the next team, but our regular contacts with the authorities continue on an ongoing basis.

QUESTIONER: If I can just follow-up on that on Ukraine. The IMF was flexible letting Ukraine use reserves to pay for gas payments in December. There's another gas payment coming due. Is there any chance you could be flexible again?

MR. HAWLEY: Our view is that Ukraine has sufficient foreign reserves to remain current on all external payment obligations including gas.

QUESTIONER: I want to ask you about Greece. What is the Fund's reading from the EU meeting and its role in Greece in dealing with the fiscal problems?

MR. HAWLEY: As you know, we've said that we welcome the support for Greece from its European Union partners and that we, as noted by the European Leaders, are prepared to offer expertise and support as necessary. I'm sorry. What was the second part of your question?

QUESTIONER: I do have another follow-up actually. I'm trying to figure out what does the expertise mean? You've spoken about technical assistance, but what exactly does the Fund see itself doing regarding technical expertise?

MR. HAWLEY: The Fund offers technical assistance to many countries in the areas where the Fund has expertise, and an IMF technical assistance team was in Athens in January and explored TA in the areas of tax administration, tax policy, budget management and pension reform and we stand ready to respond positively to requests for future technical assistance.

QUESTIONER: May I follow-up on that?


QUESTIONER: The one thing that I'm curious to know is if Greece lied or was not very truthful about its data leading up this crisis, does the Fund have a role in trying to sort through those fiscal problems as well or not?

MR. HAWLEY: I can't comment specifically, but I would note that another area of Fund expertise is in statistics and that our Statistics Department has provided input to grant independence to the Statistical Institute.

QUESTIONER: Regarding Greece, will the IMF help or give any monitoring or any advice on the plan that they outlined for 2010?

MR. HAWLEY: Our role or the request has been so far the provision of technical assistance. And I said that we stand ready to provide expertise and support as necessary, but I don't have further comment on the specific role the Fund might play.

QUESTIONER: I'm going to stick with Greece. Has Greece at all mentioned any sort of discussion beyond technical advice, financial aid, anything beyond technical? Have discussions taken place on anything more than that?

MR. HAWLEY: I can only tell you that Greece has not requested financial support from the Fund if that is your question.

QUESTIONER: Have European leaders told you what they expect from you since their meeting last week at the summit?

MR. HAWLEY: I don't have anything further on communication from the European authorities to us.

QUESTIONER: When would a mission go to Greece?

MR. HAWLEY: I don't have mission dates. I don't think they're yet set.

QUESTIONER: I have a question regarding the announcement yesterday on gold sales. I'd like to find out about the timing of these gold sales. I know you said they're going to be phased over time, but I'd like to find out about why the Fund thinks that now is the time that it should go onto the open market. Is it not maybe perhaps better to wait for more central banks to come in? Do you have any comment on why specifically they think now is the time to move on it? There is speculation out there that the Fund is trying to drive down market prices through this and therefore could allow central banks to -- could afford the gold more. There is also speculation that maybe you're coming to make a bigger profit. Could you maybe just address any of those?

MR. HAWLEY: No. I'd say only that what happened yesterday was the decision to allow us to make phased on-market sales. The strategy for our selling is that as always, sales of gold by the Fund are done in a manner that doesn't cause disruption to the gold market. And the way we achieve that is to do our sales in the same manner that is being done successfully by participants in the Central Bank Gold Agreement in recent years. Participants in that agreement have indicated that the proposed volumes of sales are within the ceilings set by the Central Bank Gold Agreement. If you want, I can remind you what those are. Those are 400 metric tons annually and 2,000 tons in total during the 5 years starting from September 27, 2009.

QUESTIONER: Does the Fund have an idea why central banks are not interested in buying more of this gold consider what the global conditions are?

MR. HAWLEY: We continue to be prepared to sell to central banks if they wish.

QUESTIONER: To sell under this agreement does it mean that you have a maximum for every year?

MR. HAWLEY: No. What I described was the Central Bank Gold Agreement.


MR. HAWLEY: That doesn't describe the volumes sold by the Fund. The amount of gold potentially sold by the Fund is 191.3 metric tons, but I'd refer you to our written announcement to make sure that the figures are completely understood. The context is provided there.

QUESTIONER: To follow-up, I'm coming back to the central banks and their interest in buying gold. Would you not have expected more central banks to be interested in buying this gold by now? That's what Mr. Tweedy was saying, that they were going to wait until the central banks -- and clearly that's why the Fund is going to the market because there is no interest from the central banks.

MR. HAWLEY: I don't have a comment on the motivation of central banks I'm afraid.

QUESTIONER: Next I want to go to Zimbabwe. I was wondering if you've got a Board date on Zimbabwe's voting rights, please.

MR. HAWLEY: Yes. The Executive Board is scheduled to discuss the request for the restoration of voting rights and thus the eligibility to use general resources, that's ordinary resources, tomorrow, Friday.

QUESTIONER: A follow-up on a technical question. What does it have to do to get those voting rights restored and what do those voting rights represent?

MR. HAWLEY: To get voting rights restored you need a decision by the Executive Board and that decision could come tomorrow at the conclusion of the Board meeting. And your next question was what does that mean?

QUESTIONER: What does that mean?

MR. HAWLEY: The restoration of voting rights means that Zimbabwe can like other members participate in the decision making by casting votes, access to the general resources, the quota resources of the Fund which means borrowing. However, there is an important caveat that I should add. Access to the general resources of the Fund, the quota resources of the Fund, would depend on Zimbabwe clearing its arrears to the Poverty Reduction and Growth Trust, that is to say, to the concessional lending arm of the Fund, and access to GRA in the case of any country is subject to our usual policies where you have to offer up a problem that enjoys the support of the Executive Board.

QUESTIONER: Last I checked, they hadn't off the PGR Trust.

MR. HAWLEY: The latest data I have on that is that the arrears, it's the PRGT, amount to 89.5 million SDR. That's about $140 million at the end of 2009. Zimbabwe has made some quarterly payments of $100,000 to the Fund from May 2009 as we've previously disclosed toward clearance of those arrears.

QUESTIONER: Let's come back to Greece because I don't fully understand the whole technical assistance stuff. It's not I understand technical assistance, but for the Fund to go and do that technical assistance, does Greece have to invite the Fund to come and do it or is that just an informal discussion? How does that work?

MR. HAWLEY: Normally a country makes a specific request for technical assistance. I hesitate to use the word routine, but in fact that's what it is, countries routinely request the expertise of the Fund on technical assistance.

I'm taking the question [submitted online], asks if there is a threat of a double-dip recession growing. I can only repeat what we have said fairly recently that the global recovery is off to a stronger start than anticipated but is proceeding at different speeds across different regions so I don't have a specific comment about the likelihood of a double-dip.

QUESTIONER: I want to come to the issue of contagion flowing out from Greece. Does the Fund feel that there is contagion or that there isn't contagion, and if you think that there were some contagion do you feel that since the E.U. meeting that conditions have improved?

MR. HAWLEY: Are you talking about contagion generally or specifically?

QUESTIONER: I'm talking about contagion going into the rest of the Euro Zone, possibly also into Eastern Europe.

MR. HAWLEY: We don't want to speculate about motives driving recent market developments, but I would note on Portugal and Spain that we do see differences between their circumstances and those of other parts of the Euro Area, notably their strong national statistics and institutions, their strong track records and credibility and their strong fiscal starting positions.

If there are no further questions, I'll end this briefing.

QUESTIONER: I just want to make clear that the technical assistance in Greece that you're giving now, is it for longer-term projects or is it for short-term projects?

MR. HAWLEY: I said that the technical assistance mission made a preliminary visit to look at the areas of tax administration, tax policy, budget management and pension reform and that we stand ready to respond positively to further requests for technical assistance. Thank you very much. The embargo is 10:30a.m.[Washington time], 1530 GMT. Thank you very much.


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