Transcript of a Press Briefing by Caroline Atkinson, Director, External Relations Department, IMF

March 18, 2010

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

MS. ATKINSON: Good morning. Welcome to the IMF. This is our regular biweekly press briefing. I'm Caroline Atkinson, the Director of the External Relations Department at the Fund. The briefing here is embargoed for 10:30 a.m. Washington time, 1430 GMT.

Just one point, as we're getting close now to the Spring Meetings in late-April, the online press registration for those meetings has already opened. A website is available with a tentative schedule through our home page.

A couple of other things. The Managing Director is in Europe. He gave a speech yesterday. He will be speaking tomorrow in Brussels on “Crisis Management Arrangements for the European Banking System” at a conference by the European Commission. Not next week but the week after that, he will be traveling to Europe to Warsaw and Bucharest. In Warsaw he will be meeting with the authorities, giving a major speech and having a panel debate on Eastern Europe's transformation since the Cold War. In Bucharest he will be meeting with the authorities and having discussions with students on the IMF’s role and also giving a speech to Parliament.

He will then be going to the Haiti Conference in New York on March 31. Then from that on to the Middle East where we've been having, and you may have seen through our website, a Youth Dialogue with round tables around the region. That will culminate in a round table panel discussion with the Managing Director and students from eight different countries in the region on April 4. That will be broadcast live by BBC Arabic TV.

Before that, the First Deputy Managing Director John Lipsky is going to Beijing for the China Development Forum from March 20 through 21 --that's this weekend-- and then to an important conference in Vietnam on low-income countries. Often one thinks about low-income countries just being in Africa, but of course there are some in Asia. There will be a seminar with the IMF and the government on “Post-Crisis Growth and Poverty Reduction in Low-Income Asia,” which we will also be featuring on our website.

I'll open it up to questions from people in the room and from those of you on the Online Media Briefing Center. Please identify yourselves and your affiliation before asking any questions.

QUESTIONER: The first question, was there any contact between the [IMF managing] director and the Greek prime minister in the last couple of days, because they were both in Europe, Brussels, the European Parliament back and forth?


MR. TELIS: The Greek finance minister was here last week.


MR. TELIS: Can you just give us some kind of readout of what he talked about?

MS. ATKINSON: Yes. I think there were technical discussions, in particular about the kind of technical assistance that the IMF is offering and providing to the Greek authorities. So his discussions really focused on that.

QUESTIONER: I'm also going to ask the normal Greece question in case you surprise me. The question is: has Greece at all spoken to the IMF about possible financial assistance? You've seen the news reports coming out?


QUESTIONER: How concerned are you that the issue of funding for Greece isn't being resolved quicker?

MS. ATKINSON: I don't have anything for you on that. I think that I'm not going to surprise you, I'm afraid. We have not had a request for financial assistance. As you know, the request of the authorities and the EU Commission we are offering technical expertise and providing technical assistance.

I've got a question online that is about Portugal. The Portuguese government has presented its plan to bring the deficit down from 8.3 percent of GDP in 2010 to 2.8 percent in 2013. What is our preliminary evaluation of the plan?

Our staff has not had an opportunity to discuss the plan with the authorities in detail, but it certainly seems broadly appropriate both in terms of the macroeconomic scenario which is a realistic one that underlines the plan, the goals, and the measures that are included in it. And of course its success will depend on those measures being fully implemented, but our first impression is that this looks like a strong plan. Thank you.

QUESTIONER: I will burden with one more on Greece. Next week on Thursday and Friday, it's the regular European Union Summit. The finance ministers this week postponed any decision on Greece for the summit. Chancellor Merkel seems to be reluctant to go ahead with any kind of assistance. So the Greek prime minister speaking at the European Parliament today said although Greece prefers some kind of not financial assistance as you say, they're not asking for it, but some kind of backup from the Europeans. If they do not get that at the summit, everybody agrees that the IMF is a possible or a potential solution.

Can you briefly tell us how does it work, assuming Greece in a week or 2 weeks at the beginning of April decides that it's not working with the European Union and they want to go to the IMF? What's the time --because we have loans that are running that have to be paid off-- so how long does it take, and what's the process if a country decides, like the situation of Greece, decides to come to the IMF?

MS. ATKINSON: If I can just repeat again that of course, we haven't received any request for financial assistance; we are working closely with the E.U. Commission; and I believe we've often said that we expect the E.U. and the Eurozone countries to want to and to plan to resolve this question by themselves.

On a more general note on what happens, the procedure with the IMF is that a country would request financial assistance and then we would go and assess the conditions. And this can take a different amount of time depending on the state of negotiations and so on. There is a procedural issue which is that a country first requests assistance from us and beyond that we can move very quickly; sometimes there are things that hold us up. It just depends on the nature of the country.

QUESTIONER: Could it be like days? A year?

MS. ATKINSON: If you look at our experience, sometimes we move very quickly and sometimes not. It's not just whether we move quickly, it's what the conditions are with the country.

QUESTIONER: Closing the gap on Greece, so in some way, you could say that the IMF is ready in case to start the technical procedure for possible financial assistance or not? Is it ready or not?

MS. ATKINSON: As I said, we have discussions with the Greek authorities, and with the request of the E.U. and the Greek authorities, we've been providing technical assistance. Our readiness has nothing to do with Greece. We hope to be ready for everything or anything to do with financial assistance.

QUESTIONER: We have been waiting for a mission date for the mission to go to Greece for technical assistance. Has a date come up yet?

MS. ATKINSON: I don't think it's a matter of just a single date because there are different teams on different issues. We have some people there now for instance who have been looking at the banking system, but it's just a small team and it's a different issue.

QUESTIONER: May I qualify something? Does technical assistance include monitoring at all? Because when Papandreou spoke to the Center for American Progress last week, the question was, he said that part of the technical assistance was monitoring. I understand it to be two separate things.

MS. ATKINSON: I think that we have specific technical assistance that we are discussing and discussing the requests for it in areas of budget implementation, statistics, I mentioned the central banking. The E.U. and Greece asked us a couple of weeks back --I don't remember exactly when but I had a press statement about at the time-- to offer technical expertise. I don't really have anything to add beyond that.

QUESTIONER: I have just two things. On Greece to clarify, I haven't heard the phrase today we stand ready to help Greece if they ask for help which has been a recurrent phrase. Is it still true?

MS. ATKINSON: It's still true. It's still true.

QUESTIONER: Like a central banker --

MS. ATKINSON: No, you're quite right. You're quite right.

QUESTIONER: The other thing is about Ukraine. Do we have the exact dates of the visit?

MS. ATKINSON: I'm pretty sure we have people talking again on a technical basis. I'm just going to check on that. We have a technical mission in Kiev right now, and the authorities have requested a negotiating mission. But there is technical work going on now in Kiev on the public finances.

QUESTIONER: And the negotiation team, do we have a date on that?

MS. ATKINSON: We don't have a date on that.

SPEAKER: What would it take to resume payments at this stage now that you have people to talk to in the government?

MS. ATKINSON: Just agreement on the next phase of their program. Normal development of understanding what their policies are in the context of the existing program and agreement with them on the next steps. The next step would be that a negotiating -- this technical team that's there now obviously has to come back and then a negotiating mission would go in due course.

I have a question online. He says: Norway's foreign minister has said that the IMF's review of Iceland should go ahead independent of the Icesave dispute and he encourages the IMF to do so. Dominique Strauss-Kahn, the Managing Director, has said that the review will go forward independent of Icesave and the question is: will the IMF review the Iceland program before the Icesave dispute is settled?

On that I just would say that, as we've said before, the Icesave agreement is not a condition of our program, but we do have to be sure for this program, as with any other, that we have financing assurances in place before we go ahead. And the second review would come to the Board once we are assured of those financing agreements.

QUESTIONER: Changing the part of the world and going to China. Yesterday I read a statement from Mr. Strauss-Kahn about the yuan, the currency, being definitely undervalued. I wanted to know if you had anything to articulate on this or to comment. Thank you.

MS. ATKINSON: We have said a number of times that the yuan appears to us to be substantially undervalued. We've also said that what's important is to think about the rebalancing of China's economy. More broadly it's important that the Chinese themselves are interested in boosting domestic demand and private consumption, and exchange rate movements would be just a part of that. It's also of course important to think about global rebalancing, and that means that deficit countries as well as surplus countries need to make some adjustments.

Turning to this question online: the Turkish economy minister Babacan said that the main disagreement with the IMF was how Turkey will spend the money. What's the main factor according to the IMF? Can you give any details about the negotiation period which lasted for 18 months?

I'm obviously not going to speak for the minister. He can speak for himself. What I will say is that I believe we've had very good and agreeable discussions over this period with the Turkish authorities and we're in full agreement with them that given the developments in the world economy, the appropriate next phase is for us to undertake and complete our normal Article IV consultation. We expect that to be scheduled in coming weeks. I think both sides are very happy about taking that step forward.

QUESTIONER: I have a further question on China. The issue of the Chinese currency has gone much broader than the United States. The rise in currencies in large emerging economies now is creating added fuel to that yuan debate. Do you think that if the U.S. had to label the yuan, China, as a currency manipulator, that that would help defuse a lot of this heat going on at the moment which of course comes just before Treasury's report every year? The question again is, the issue is now being worsened by the fact that emerging markets also feel that they're being hurt by the Chinese currency that is much lower than theirs while their currencies have appreciated. Do you have any feeling about what the impact of that is on emerging economies?

MS. ATKINSON: One comment about emerging market economies is of course that they have been tending on average to recover rather better than advanced economies from the recession. And in particular they have tended to be less dependent on government stimulus of one kind or another and more responding to recovery in private demand. That's just a comment and that's particularly true in the growth rates we expect to be particularly rapid in emerging Asia, but in Latin America and in Africa where we were just recently. It's also the case that the recovery is proceeding a little faster than in the advanced economies.

MS. WROUGHTON: I have a follow-up. Yesterday in Congress lawmakers were saying that the IMF should take a bigger role in trying to defuse the situation on the yuan. Are there any talks that you know of that are scheduled with the IMF to try or plans to try and intervene here in some way? That’s being the Fund's role in financial stability-- that’s coming in and being a mediator in how to fix this problem.

MS. ATKINSON: I think the global imbalances issues, which really this is a part of, is a very big and important issue which of course the IMF is working on and we're working with our member countries. We have in the context of that frequently commented on the kinds of measures that we think are needed to rebalance demand both with more reliance on domestic demand and consumption in China and in some other countries. The surplus countries include Germany in the E.U., China in Asia and others, and then deficit countries also have to rebalance their demand. So this is part of a global issue. The Fund is obviously a good place to have those discussions. We make our views known and we have done that and continue to do that and I think that's an important part of it. There is also the G-20 process, as you know, where issues of how best to support strong, sustainable and balanced growth going forward are very important ones for the G-20 ministers and leaders.

If you don't mind, I've just got a logistics question online on whether any senior Fund official will be attending the IADB meeting in Cancun which is coming up. Yes, indeed. I should mention that Nicolas Eyzaguirre, the Director of our Western Hemisphere Department, will be attending the meeting along with some of his colleagues. He will do a press conference there. If you contact our Media Relations division, they can give you information. We will have our people on the ground also.

QUESTIONER: To be honest I'm a diplomatic correspondent and not a financial correspondent, so let me ask one more question on Greece. For comparison reasons, is there an interest rate that usually -- or in this case more specifically, any loan that would be given to Greece would have? Because as you know, the problem with Greece is that the rates are very high at 6-1/2 or something like that percent.

MS. ATKINSON: IMF loans carry standard interest rates. I don't remember them off the top of my head, but they're certainly available through our website.

QUESTIONER: But you have an idea?

QUESTIONER: What you find about that and it relates to what you're saying is how much can Greece -- Greece's quota is really small in the IMF. Do you have an idea of how much they could borrow? No? What is Greece's quota in dollar terms? I think it was like 150 million.

MS. ATKINSON: I'll have to get back to you on Greece's quota. I can't remember it off the top of my head. I'm not going to go there. That's a hypothetical question obviously.

Thanks very much indeed to everybody.


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