Transcript of IMF Press Briefing

September 28, 2017

MR. MURRAY: Good day. I'm Bill Murray, deputy spokesman for the Communications Department here at the IMF. This is another of our regular briefings. Again, we are embargoed until 10:30 a.m. Washington time, which is roughly one hour from now.

What I want to do, I have some fairly long opening remarks, I'll just kind of walk you through some of the upcoming events. We are getting to somewhat of a busy season, so bear with me, I'll walk through those. And then I'm going to open the floor here to questions, and questions to those of you that are online.

So, starting with some of our events: tomorrow, Friday, September 29 th, Managing Director, Christine Lagarde will deliver a keynote speech at a conference commemorating 20 years of independence of the Bank of England. Managing Director Lagarde’s address will look at the impact of technology on central banking. On Monday October 2nd, back here at the IMF, we will host an award ceremony of the Citi Tech for Integrity Challenge, which is a challenge that recognizes innovative ways in which technology can be used to fight corruption and improve public governance.

Managing Director Lagarde will be here, she will speak on Monday at 3:30 p.m. about the detrimental social and economic impact of corruption, and the Fund's role in fighting corruption. Both the Managing Director's Bank of England address, and Monday’s address, here at headquarters, will be made available to the press under embargo.

On Thursday, October 5th, the Managing Director will deliver what we call our Curtain Raiser Speech for the upcoming IMF/World Bank Annual Meetings, which are scheduled during the week of October 9 th, here at IMF Headquarters, and the adjoining World Bank Headquarters complex.

The Managing Director's speech will be delivered, however, in Cambridge, Massachusetts, at the Harvard Kennedy School of Government. Following her speech, she's going to be participating in a conversation moderated by Professors Larry Summers and Nicholas Burns at the Kennedy School.

Again, Media Relations will be in contact with all of you with full details and other arrangements. Now, I'm going to turn to some of the Annual Meetings events.

This year's meetings will feature a wide-ranging series of seminars on key topics such as: inequality, fintech, global imbalances, corruption and many other issues. There will also be two conferences during the week of the Annual Meetings. One conference will focus on the future of globalization, and it has a high-level academic lineup, including Angus Deaton and Paul Krugman, both are Nobel Laureates.

There will be a second conference here at headquarters called Toward 2030. It's part of the Fund's effort to help countries meet the Sustainable Development Goals through policy discussion and other interactions. During that conference, there will be keynote addresses by Dani Rodrik and Ricardo Hausmann, who are also both of the Kennedy School.

As usual we'll have the publications of our main surveillance documents during the Annual Meetings, and we have started, as you know, we've started releasing some of the background chapters of World Economic Outlook, and upcoming will be the background chapters of the Global Financial Stability Report.

The main chapters of the World Economic Outlook will be released publicly on Tuesday, October 10th. IMF Economic Counsellor and Research Department Director Maury Obstfeld will present the WEO at a press conference here at 9:00, that's on Tuesday, October 10th.

On Wednesday, October 11th, Financial Counselor and a Director of our Monetary and Capital Markets Department Tobias Adrian will present the main chapter of the Global Financial Stability Report. That press briefing is at 8:00 a.m. It's at 8:00 a.m. on October 11th.

Also on October 11th will be the release of the latest Fiscal Monitor by Fiscal Affairs Department Director Vitor Gaspar. And that will be, that press briefing will start here at IMF headquarters at 9:30 a.m.

The full line up of the Annual Meetings' events is of course available online on our main website,, and it also includes details of the 36 th Meeting of the International Monetary and Financial Committee, that's the ministerial-level body that provides guidance to the Fund. As many of you know, Agustin Carstens, of the Central Bank of Mexico, is chairman of the International Monetary and Financial Committee.

Before I take questions from you here in the room, and again online, I wanted to offer some brief personal comments regarding the impending retirement of Bruno Silvestre, who is a valued member of the Communications Department team. Bruno joined Media Relations from the French Treasury when I was chief of the Media Relations division. He has been a real pleasure to work with for nearly a decade, and I wish him the best. I wanted to raise that with you.

One little fun fact is that Bruno is the only two-time Emmy Award Winning member of our department. He's the only Emmy Award Winner in our department. But he won those awards while he was a producer at CBS TV. So, my hats off to Bruno for those awards and for the service he has undertaken for the IMF. Bon Voyage, Bruno! With that, let me open the floor.

QUESTIONER: Thank you. What Poul Thomsen said earlier today about the Greek banking sector, it sounds to me like a compromise on your behalf. Can you, please, help us understand: what's the latest there? Thank you.

MR. MURRAY: Okay. To contextual it, I'm not able to do that, but I want to remind everybody in the room what happened overnight. Poul issued a statement regarding our views on the Greek banks, and I'll just repeat the key points which are, the most important issue is that, to be sure that Greece has a strategy for how to deal with the its exceptionally high level of nonperforming loans over the medium term.

The ECB, the European Central Bank, has suggested that bringing forward already-scheduled stress tests and undertaking targeted asset reviews will allow us to assess whether the current strategy for ensuring the soundness of the banking system is adequate.

And lastly, we think that that this is a constructive proposal. That’s what Poul underscored earlier today - a constructive proposal that achieves the same broad objectives. And we are discussing the exact modalities with our colleagues in the ECB regarding dealing with non-performing loans over the medium term.

QUESTIONER: Yes. That's what Poul Thomsen said earlier today. Two weeks ago, Gerry Rice said that an AQR is a very important element of the program. MR. MURRAY: To go back to July, what we published back in July, the staff report is very, very detailed as you guys know. I'm sure you are familiar with the context of the staff report. I just refer you back to staff report in terms of that, because it's pretty self-evident. I mean the important point is that we need to deal with NPLs. I'll take one. I'm not going to take a lot of questions -- I don't have a lot to offer on Greece.

QUESTIONER: Can you just explain to us what are those broad objectives that you say are shared with the ECB, for some context? Is this the goal to reduce the NPLs, and you felt that the AQI was the best way to do that, because you weren’t very confident with the current stress test? Is that what's going on here? And on more broadly one, because we don't want to stick with Greece all the time; but can you tell us what are you most focused on at this stage of this negotiation in the review? Thank you. Is it, again, the banks?

MR. MURRAY: Okay. Thanks. Really, all I can tell you is exactly what I said, is that we have focused for some time on the need for Greece to come up with a medium-term strategy for dealing with non-performing loans. The ECB is obviously an important player in that regard. And they’ve suggested bringing forward stress tests, and we think that's a very, very constructive part of that effort, part of that exercise. That's really where things stand.

I really don't have much to elaborate on in terms of Greece. There's not much fresh. What I do want to stress, and that's really for the record, is that where we stand, we have a program and precautionary arrangement in place for the Greeks that is subject to reviews. We've stressed that IMF financing, to keep part of IMF financing as implementation of economic policies, that's in train.

The other key bit is to make sure that Greece is in a sustainable debt position. And that's really where we stand on Greece. So there've been really no major significant changes in our relationship with the Greeks, or anyone else in the last few months since we came to an agreement on the precautionary standby.

QUESTIONER: Bill, I have another question. If it's okay? And I'm going back to her question. It seems to many of us that it is another defeat for the Fund, especially for Mr. Thomsen. And the second one in three months, because he changed your policy last July and accepted to stay on the program, as you remember. Why you change your position again? And is it true that you are on the way out from the Greek program?

MR. MURRAY: I really don't have much to say on that. I think we are fully engaged with the Greek authorities. We are, as we've stated all along, our whole intention is getting Greece back on a sustainable -- a path to sustainable and productive economic growth, and that's really what the whole goal of our current engagement is. That hasn’t changed one bit.

QUESTIONER: Did Mrs. Lagarde speak to the prime minister today? This is another thing is that, is it true that Mrs. Lagarde is going to meet in London with Greek bankers?

MR. MURRAY: On the contact with the prime minister, I don't know. I'll have to get back to you on that. On the Greek bankers, there's a plan for -- as part of her visit to London, she has a number of private meetings, and one includes a meeting with Greek bankers. I think that's all -- Yes, please?

QUESTIONER: No Greek question. And the German Election is not boring anymore. Is there any -- Can you talk about the possible impact of a long and difficult coalition-fending, fighting process in Berlin, and perhaps anything the IMF wants to put on the to-do list for the German politicians when they are looking for a new coalition?

MR. MURRAY: Thanks for the question. We'll always watch developments in Europe with keen interest. Let me just basically say on the outcomes from the latest election. We congratulate Chancellor Merkel for winning the election. I think it's her fourth consecutive win. Germany plays a critical role at the IMF and is an important pillar of the ongoing economic recovery in Europe, and it's important to the rest of the world as well.

We look forward to working with the new government once it's in place, and I think, as you know, you know the process underway right now, let's see how that process plays out first before we get into speculating.

QUESTIONER: It could take very long.

MR. MURRAY: You're probably better-placed to make that call than I am. Okay. So, any other questions?

MR. MURRAY: And I'm going to turn to the

screen for a second. Go ahead.

QUESTIONER: You put out a report on slow wage growth earlier this week. I was just wondering what implications that's going to have for central banks, specifically the Fed and their plans to gradually tighten rates in the future.

MR. MURRAY: Okay. Well, ask Janet Yellen and the rest of the Federal Open Market Committee what implications low wage growth has on their decision making. I mean, the report that you're referring to, and thanks for bringing it up, is part of the World Economic Outlook, our surveillance activity. Obviously, there's a lot of puzzles right now that the economic profession, in general, is raising, and Tao Zhang, Deputy Managing Director Tao Zhang, spoke earlier in the week at the National Association of Business Economics at their annual meeting in Cleveland.

He touched upon this topic as well there in his address on some of the key issues of the moment that economists are grappling with, and certainly slow wage growth, the productivity puzzle, all those things are what all economists are exploring right now. But in terms of implications for the Fed, talk to the Fed.

From our standpoint, we have long said that in terms of the removal of accommodation by the Fed, it's going to be gradual; it's going to be data dependent, and it seems to be playing out that way. So, there's nothing, from our standpoint, in context with the Fed at the moment that we find unusual or surprising.

Let me turn to the screen here and I can come back to the room, but let me take a couple questions. We have questions on Ukraine, Zimbabwe, and Congo Brazzaville. So, let me start in that order.

The IMF is emphasizing the pension reform as a key issue for Ukraine's next tranche. Has the IMF compromised on its conditionality on establishing an anti-corruption court in Ukraine? Thanks.

Let me go through a couple points that we've made in the past and also for emphasis, and remind everybody that First Deputy Managing Director David Lipton was in Kiev only less than two weeks ago. So, we're, indeed, in close contact with the authorities regarding pension reform. Its implementation remains a critical condition for the fourth review of the IMF program with Ukraine.

We urge the authorities and the parliament to ensure that the adopted pension law achieves the objection of the reform, which has been worked out in liaison with the IMF and the World Bank. We stand ready to further cooperate closely with the authorities on any possible revisions the draft pension law may require in order to meet the objectives of the reform. That's on Ukrainian pension reform law.

Now, let me turn to Zimbabwe. Let me see if I have that here. I may have to jump into my book. Yes, excuse me a second.

How can the IMF assist Zimbabwe in finding lasting solutions to the current challenges? Any short-term assistance?

Well, don't forget Zimbabwe has been in arrears to the Fund and to other institutions for some time, and it's been working through those, and that's an important point. Additionally, IMF staff is assisting Zimbabwe, in the absence of financing, the IMF staff is assisting Zimbabwe with policy advice and capacity development.

The financial sector is of particular focus at the moment, and its current difficulties in securing access to dollars have deeper, underlying causes that need to be addressed, including through financial consolidation, so that the government does not persistently spend more money than it is. And also on structural reforms to improve Zimbabwe's competitiveness and to facilitate capital inflows -badly needed capital inflows.

Last point is that the IMF is encouraging the authorities to press ahead with its adjustment, the economic adjustment, and reforms in a timely manner so that Zimbabwe can realize its potential.

Let's see. Another question here, this is from Congo, Brazzaville. Please give an update of the IMF's review of the debt and disclosures of Congo Brazzaville, and confirm or deny the involvement of Lucien Ebata in the talks.

I’m not going to comment on Lucien Ebata. You have to go to the Congolese. I've seen reports regarding his name, but it's not something I'm going to comment on today. Let me just bring you up to date on where we stand regarding Congo.

At the request of the authorities of the Republic of Congo a staff team is currently in Brazzaville. We've had a series of contacts with the authorities over a possible IMF program since February. This is probably the third such mission, I believe. This mission is going to take stock of recent economic developments, finalize the assessment of Congo's debt and update our current macroeconomic projections, and that's basically where we stand right now with Congo, Brazzaville.

He has another question, which I guess if I have something that's regarding Pakistan, and then we'll turn back to the room and then wrap.

On Pakistan it's reported that the IMF said that it's been told by Pakistani officials that the restrictions would be removed. What restrictions? It is reported the IMF said that it had been told by Pakistani authorities that the restrictions would be removed within a year, but Mr. Abidi said now his government was planning to impose more.

We're going to have to get back to you on that question because I'm not sure what restrictions you're talking about. I could guess, but I'm not going to do that at this moment. Media relations will get back to you on that question. Something's missing there.

I think that's it from online. We have a question back here in the room. Then we can wrap up. Thanks.

QUESTIONER: Thank you. Does the IMF have an assessment of the tax reform proposal announced by the president and Congressional Republicans yesterday?

MR. MURRAY: Thanks for the question. You're talking the U.S. tax reform. Yes, obviously it's just come in where our staff is, obviously, analyzing both Western Hemisphere and Fiscal Affairs Departments are going through the administration's proposals at the moment. It's very much a work in progress in terms of our analysis.

But what I do what to underline is, as you probably know, a few months ago we released the U.S. staff report, our annual review of the U.S. economy, and in that we agree with the administration that tax reforms are important and necessary. We also stressed, as the country report states, that supporting low and middle income households and promoting investments in human and physical capital formation would feed back into better growth and lead to more broad-based improvements in living standards over the medium term.

So, our general principle is tax reform is definitely needed in the United States. We're heartened that that is underway. Now we have to look at the details, and we'll get back to you when we draw a firm conclusion.

With that, I think I'm going to wrap up. Again, our embargo is -- I'm getting prompted here on a question online about Ukraine corruption. If you want to send me the question I'm happy to take it right now before we wrap up, and then we'll do that. If you want to loop me back into the question.

There was a question, I'm not sure from whom. It's not coming here. We'll be back to the online, and we can post it with the transcript later today. Okay. Anyway, thank you very much. 10:30 a.m. embargo. Look forward to seeing you at the annual meetings. It's two weeks from now. And again, prior to that we have the Managing Director's Curtain Raiser speech at the Kennedy School.

Thanks again and see you later. Bye-bye.

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