Transcript of a Press Briefing by David Hawley, Deputy Director, External Relations Department, International Monetary Fund

Washington, DC
Thursday, November 17, 2011
Webcast of the press conference Webcast

MR. HAWLEY: Okay. Good morning, everyone, and welcome to another of our regular briefings. As usual, this is under embargo until 10:30 Washington time. That's 1530 GMT.

I'm David Hawley, Deputy Director of the External Relations Department, and, as usual, before going to your questions, I'd like to make a few announcements.

This is the first briefing in which we're using simultaneous interpretation. Journalists taking part online through the IMF's press center can choose to listen in Spanish by clicking the radio button.

We'll be completing the roll out of the press center in the coming couple of weeks, when we'll switch to distributing press materials by journalists' self-expressed areas of interests. So, if you're interested in continuing to receive updates, please update your user profile so you receive what you're interested in.

As you know, the Managing Director has recently returned from an extensive period of travel that she is continuing, and this time she'll be traveling to Latin America. So, she will be in the region from November the 28th to December the 2nd. She will be visiting Peru, Mexico, and Brazil. She will be in Peru on November the 28th, in Mexico on November 29th and 30th, and will arrive in Brazil on December the 1st. She will meet the authorities in all three countries and non-official audiences. We'll give you a fuller schedule before long and, of course, including details of press availabilities.

Finally, Deputy Managing Director Min Zhu and the Financial Counselor, Jose Vinals, will be at a conference in Shanghai about systemic risk oversight, and the Fund's financial sector assessment program, which is known as the FSAP. This conference is organized together by the IMF and the People's Bank of China, and it will bring together central bank governors and senior financial sector regulators and supervisors from Asia and elsewhere.

So, with those, I open for questions.

QUESTIONER: Was this trip that the Managing Director just completed her first major international trip?

MR. HAWLEY: She traveled extensively since coming to the Fund. What set this travel apart was that it represented a series of bilateral visits to important members of the organization, in this case Russia, Japan, and China.

QUESTIONER: She seems to have mentioned that this was her first. That's why I was asking.

MR. HAWLEY: She's traveled, as you know, in the context of summits and other international events.

SPEAKER: How much money for Europe has she been able to raise during this trip?

MR. HAWLEY: Well, as you know, and as she said, emerging market countries have, in many cases, expressed a readiness to augment the resources of the Fund. At this stage, we don't have anything by way of precise numbers for you.

QUESTIONER: Can you say anything else about her trip to Russia, how it went and what the outcome was?

MR. HAWLEY: It was an extremely successful trip to Russia. I refer, though, to the press release -- the statement she issued at the conclusion, and the press conference. I don't anything to add to that.

QUESTIONER: I would like to know if the IMF can comment on the new path taken in Italy with the new government led by Professor Monti, and he taking on it himself also the Minister of Economy. So, I would like to know if the IMF can comment about these and believes that these will gain new credibility to the country and also in the face of the market reaction. Thank you.

MR. HAWLEY: The creation of a new government with a clear program creates political clarity, which is a positive development.

QUESTIONER: Regarding Greece, has the IMF requested written commitments from the two leaders of the two parties in order to get Greece the six tranche?

MR. HAWLEY: As you know, we welcome the agreement on a national unity government in Greece as a step to achieving greater political certainty and stability. It's important that the unity government now shows its commitment to the implementation of the economic program, and the October 27th agreement with the European leaders so that Greece can return to the path of growth, job creation, and sustainable public finances, that by way of background.

And as we have also made clear, we stand ready to work with the Coalition. And once broad political support for the measures under Greece's economy program is assured, then we can proceed with completion of the fifth review and the release of the sixth tranche. And in this context, we support the European Commission in seeking assurances from the Coalition that they are fully committed to the program.

QUESTIONER: But did you put any conditions to the Greek government, the Greek parties? Did the IMF put any conditions, or you just support the Europeans?

MR. HAWLEY: You are speaking now about assurances, commitments.

QUESTIONER: Yes, written assurances.

MR. HAWLEY: Let me be clear. I'm simply saying that we are seeking assurances. I'm not going to describe specifically how those assurances will be received. It's enough that we're satisfied in due course that assurances are there, and I can't go beyond that. I have nothing beyond that.

QUESTIONER: What do you mean by broad political support? Are you talking about that everybody needs to sign up on this program, including everyone from the Coalition and the opposition, number one. Number two, turn to Italy, when is the monitoring team going to Italy, and how is that going to be conducted?

MR. HAWLEY: I've got nothing to add on broad political support, so let me turn, if I may, to your Italy question, which was on timing. On timing, as the Managing Director has noted, we expect the mission, which is there, as you know, at the invitation of the Italian authorities, to be there in late November.

QUESTIONER: And is this just an IMF mission?

MR. HAWLEY: Yes, this is an IMF mission, yes.

MR. JIAO: Is the IMF worried about the situation in Europe? And should European nations carry out more measures to shore up confidence? Secondly, could you elaborate a little bit on the Shanghai symposium attended by Min Zhu and co-hosted by China Central Bank on the topics?

MR. HAWLEY: Okay. I'll start with your second question where, I'm afraid, I'm going to have to have some to come back to you. I don't have further details at the moment, but we'll make sure that someone provides you with a fuller picture.

I've got little to add on Europe where our views are well known. There is great concern about Europe. Our view, again, as we've said before, is that it is important that the European authorities move expeditiously to implement their plans, to strengthen a comprehensive crisis management framework.

QUESTIONER: On Italy, can you tell us a little bit more about it, is the IMF putting back on the table the credit line or the loan agreement that was offered back in October?

MR. HAWLEY: Okay. Let me, for the sake of emphasis, say where we stand on it. I'm going to direct your focus to the mission which is part of intensifying our surveillance and monitoring work, which is intended to support the major efforts being undertaken by the Italian government on a range of issues in both fiscal adjustment and structural reforms.

Now, you're asking about financing. The general answer is that the Fund offers financing to a country when a country requests it. Such a request has not been made by Italy, so that's where we stand.

QUESTIONER: What if they were to request it, would they get a credible response?

MR. HAWLEY: That's a hypothetical question. Any request for financing by any member country--and any member country is entitled to request financing if it sees the need--gets careful consideration on its merits.

QUESTIONER: Yesterday you released a Press Release on Portugal. And normally in my experience, you only talk about disbursing monies when the question has been determined. But in this case, I was slightly confused. You did not speak about agreement even on the working level on concluding the review. But at the same time, at the end of the Press Release you did speak about releasing the money, including giving the probable timing of December or January. So, my question is, has the question pre-determined that Portugal will be receiving that money? What's happening?

MR. HAWLEY: You're looking in the context of reviews, there is a staff level agreement, which is reviewed by management and then the board. That is normal practice.

I'll turn, if I may, to questions submitted by journalists online. And I'll go to a questioner from Pakistan, who asks if Pakistan's economic team will be able to achieve the fiscal target given by the Fund, including the power sector reforms? And I have another questioner on Pakistan, who adds, could you update us on the Article IV consultation with Pakistan, and do you think Pakistan needs a new program?

There is an Article IV discussion with Pakistan, which is taking place at the moment. There will be a press release at the end. I don't have a precise date for that press release, but that will update us on our views on Pakistan. And there has not been a request from the Pakistan authorities for a program.

QUESTIONER: Today, there is speculation in Greece that some terms of the negotiation about PSI are connected with the six tranche from IMF, and that's why IMF delayed its decision. Can you confirm this?

MR. HAWLEY: The process on PSI is driven by discussions between Greece, represented by its advisors and by the creditors to Greece. The parameters for that process were established during the October the 26th summit. And that is where we stand.

QUESTIONER: What is your participation in these talks?

MR. HAWLEY: The precise nature of our involvement I haven't information, but the point you should bear in mind is this is a bilateral process between Greece and its creditors.

QUESTIONER: I understand, but can you tell us if Mr. Thompson is in Frankfurt?

MR. HAWLEY: My understanding is that Mr. Thompson is not in Frankfurt.

I have a question from Liliana Franco from Ambito Financiero in Argentina, who says, has there been a request by the Argentine authorities to allow the IMF to review the Article IV?

As you know, it's some time since there has been Article IV, and at this juncture there is no firm date for resuming Article IV consultations.

I've got a number of questions on the trips to Mexico and Brazil, notably from asking for details of the trip. As I say, details on the schedule will be forthcoming, so we'll post those as get them available.

QUESTIONER: Have there been any talks between the IMF and European officials about program potentially to have the ECB lend to the IMF, and potentially then on to Euro zone countries?

MR. HAWLEY: I haven't got anything on that news report.

QUESTIONER: You said that you are ready to intensify surveillance in Italy and support major reforms. Could you tell me what the IMF feels are the most urgent reforms needed at this point in Italy, and specifically if there is something more compared to what was already outlined in the letter that the former Prime Minister Berlusconi had given to the European Union. So, my question is double actually.

MR. HAWLEY: As I say, the precise terms of reference, if you like, of the mission are not quite final yet, so I don't have a focus for it beyond what is the program outlined by the Italian authorities.

But you've raised a question, which was covered in the recent Article IV consultation with Italy, where I'd point you to the fact that on the structural reform side, key measures included liberalizing professional services, increasing competition and local public services, and doing more on pensions and on the labor market. But for a fuller account, I'd refer you to the July 12 Public Information Notice on Italy.

QUESTIONER: We have clear comments coming out of France that there is agreement between France and Germany on the role the ECB should play in this crisis. Does the IMF have a position?

MR. HAWLEY: I just described the IMF position about the importance of a comprehensive crisis management framework, and I'm not going to answer that.

QUESTIONER: Was Mr. Borges out of IMF line with the comment that he had to correct last month, and is that a reason why he had to go?

MR. HAWLEY: Mr. Borges said that he was leaving for personal reasons, and I would draw your attention to the remarks made on his tenure by the Managing Director where she praised his handling of the crisis. So, I think that indicates that the premise of your question is not well founded.

I have a question online on the Dominican Republic: what is the state of play in negotiations of the IMF with the Dominican Republic on the stand-by agreement, and goes on to ask whether the IMF is prepared to be flexible on fiscal deficit and the electrical sector.

The state of play on the Dominican Republic is that a stand-by agreement in the amount of $1.7 billion was approved in September 2009, so a couple of years ago. The reviews of the program have advanced, but the seventh and eighth reviews are delayed because the authorities have so far not met certain program requirements, particularly in the energy sector. But we expect to resume discussions on this.

Although exact dates of the next mission have not been set, I think they will be by the first half of December. And we remain in close dialogue with the authorities, and look forward to continuing the negotiations with a view to completing these reviews together.

QUESTIONER: I have a question on the mission to Italy. Can you tell us who will lead it?

MR. HAWLEY: I don't have personal staff details yet, but as they become available, we'll pass them on.

QUESTIONER: And otherwise the goal is to write a quarterly report, as I understand it?

MR. HAWLEY: Yes. The mission frequency is quarterly. The missions will report to the Board, and we expect publication of the mission views.

QUESTIONER: And do you have a date, when?

MR. HAWLEY: Well, like I said, the first mission is likely to be late November. I don’t have a date for the publication.

QUESTIONER: When do you estimate that the IMF Board will meet to discuss about the six tranche?

MR. HAWLEY: I don't have a firm date on that.

QUESTIONER: And since we have been talking a lot in this briefing about Article IVs, how long ago did you have an Article IV with Ukraine?

MR. HAWLEY: The mission for the second review and the last Article IV on Ukraine concluded without agreement, as was noted in our press release on November the 4th. I'm afraid I don't have the date of the previous Article IV, but we can provide that to you. And we look forward to concluding the present Article IV early in 2012.

QUESTIONER: You talk about broad political support of the unity government. It is not enough that the Prime Minister of Greece, Mr. Papademos, the new Prime Minister, has the confidence of the two big parties in Greece?

MR. HAWLEY: I haven't anything further to add to the language that I used to answer earlier questions.

Thank you very much. So, this is under embargo until 10:30. Thank you.



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