Transcript of a Press Briefing by William Murray, Deputy Spokesman, Communications Department, International Monetary Fund4

March 27, 2014

Washington, D.C.
Thursday, March 27, 2014
Webcast of the press briefing Webcast

MR. MURRAY: Good day. I'm William Murray, Deputy Communications Spokesperson at the International Monetary Fund in Washington D.C. This is one of our regular biweekly press briefings. Just a reminder to everybody watching online, that it is embargoed until 10:30 a.m. Washington time, that's 3:30 p.m. GMT.

This is also last press briefing before the IMF-World Bank spring meetings here in Washington in mid-April. I'm going to go through a few of the agenda items for that meeting. But a lot of this information is available online.

If you have not registered for your press credentials for the meetings, I'd recommend you go online and do that as soon as possible.

Apropos to the spring meetings, on April 2nd, Managing Director Lagarde will speak at Johns Hopkins School of Advanced International Studies here in Washington. She will preview the agenda and some of the key issues that will be before the ministers that will gather here in Washington for the official ministerial meetings, which are April 11th and 12th.

On April 3rd, the Managing Director will be in New York City to participate in the Women in the World Summit. She will be at an event where she'll speak with Hilary Clinton in a conversation that's moderated by Tom Friedman of the New York Times. That's April 2nd.

On April 4th and 5th, Deputy Managing Director Naoyuki Shinohara will be in Myanmar to participate in the ASEAN’s Finance Minister and Central Bank Governors Meeting. That's in Myanmar, April 4th and 5th.

I wanted to point out again some of the key events into the spring meetings, beyond the MD's speech at SAIS on April 2nd.

Next week, we start the process of releasing, under embargo, a briefing, as well as the background chapters of the Global Financial Stability Report and the World Economic Outlook. Dates to mark in your calendars: March 31st, 9:00 a.m., we will release publicly the chapters of the Global Financial Stability Report. Chapter Two discusses investments in emerging market stocks and bonds over the past 15 years, and the effect of changes in the composition that global investors are likely to make in overall portfolio flows. Chapter Three of the Global Financial Stability Report examines reforms since the global financial crisis, and whether they have reduced the implicit government subsidy afforded to banks that are considered "too important to fail."

WEO Chapter Three will be released publicly at 9:00 a.m. Washington time on April 3rd. Chapter Three looks at slowing growth in emerging markets, and questions regarding the slowdown due to internal or external factors, and how much slower growth in China will affect other emerging markets. Chapter Four, which will also be released on April 3rd, looks at the persistence of a low-growth, low-interest rate environment in advanced economies. And then the principal authors of those chapters will brief the press -- again, March 31st for the GFSR, April 3rd for the WEO background chapters.

On April 8th, Chapter One of the World Economic Outlook, the growth forecasts and the reasoning behind those forecasts will be released here at IMF headquarters. Olivier Blanchard and his team will brief the press.

The Global Financial Stability Report and the Fiscal Monitor, the unreleased portion of the Global Financial Stability Report, and the full Fiscal Monitor, will be released publicly on April 9th. Again, there will be press conferences by the department directors in both cases.

April 10th -- again, to mark in your calendar -- Managing Director Lagarde will have her traditional pre-meetings press conference here at IMF Headquarters. That's at 8:45 in the morning. The way we do it is we rotate between the Bank and the Fund. This year, we go first. Next year, it will be the World Bank president would go first at these press briefings. The IMFC press conference, which is our policy guiding body, will have a concluding session on Saturday, April 12th, around 1:30 in the afternoon. The Chairman of the IMFC, Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam of Singapore, the Managing Director Ms. Lagarde, and our First Deputy Managing Director, David Lipton, will have a press conference on Saturday, April 12th.

I would also recommend you look at the program of seminars that are published on the website. Just a couple pointers on this: April 10th in the afternoon, following the Managing Director's press conference here at headquarters, she will do a conversational discussion with PBS anchor Charlie Rose about trends in the global economy. David Lipton will speak at a seminar on monetary policy in the context of the outlook for emerging markets on the same day. On April 11th, Deputy Managing Director Min Zhu will be a panelist in a seminar on income inequality. You can find a calendar of all the Spring Meetings events on

Finally, this morning we issued a press release on the conclusion of our mission to Zimbabwe. I want to refer you to the press release on our website for more details. Of note in the press release, among other things, is that we will be resuming our resident representative office in Harare in the coming months. We have not had a resident representative in Zimbabwe for almost a decade. There are some interesting developments in the context of our relationship with Zimbabwe.

Let me go to questions now.

QUESTIONER: On Ukraine, can you give us an understanding about the potential bank recapitalization needs, and where will the money for those potential needs come from?

MR. MURRAY: I'm really not able, at the moment, to go beyond what we brief on in Kiev. We just wrapped up a press conference a couple hours ago in Kiev, where we announced to have reached staff-level agreement with Ukraine. There's a fairly detailed press release. We have a staff-level agreement, still subject to approval by our management and the executive board. There's a $27 billion package. The IMF will contribute somewhere between $14-$18 billion towards that package. The reason we're giving a range is because we're still working on lining up bilateral and multilateral contributions to the overall $27 billion.

QUESTIONER: There was no mention of a debt-restructuring. So, to be clear, there's not going to be a need for debt-restructuring at this point in the program?

MR. MURRAY: We don't proceed with programs if they're deemed to be unsustainable. So, the fact that we're proceeding with the program indicates that we don't envisage, at this point, a debt-restructuring. But, you know, let's wait for the staff report to be published so we can get into more detail on that.

QUESTIONER: Staying with Ukraine -- and I also apologize that I'm not familiar with the contents of the press conference in Kiev --I understand that the rules of the IMF also precludes it from lending to a country into arrears. That is, a country needs to be current in their debt payments? Basically, does it mean that if and when the first disbursement comes, it will probably go into paying debts?

MR. MURRAY: I can't answer that question right now. I have to see the full program. But that's an assumption you're making. I can't jump to that conclusion. The program is to assist Ukraine. There's conditions attached to how they use the money -- but we'll see what happens.

QUESTIONER: I understand there is a financing need.

MR. MURRAY: So it's a balance of payments support program.

QUESTIONER: Do you know the amount of the need for the nearest future?

MR. MURRAY: Well, like I said, it's a $27 billion package, over two years, somewhere between $14 and $18 billion dollars. That's about as far as I can go right now, in terms of context.

QUESTIONER: My question is mostly about timetable. We've got the staff-level agreement, it has to go to management. When will that happen? Then, I gather, from the time that management accepts it, it has to be two weeks before it goes to the Executive Board. Will this get decided before the spring meeting or after? Because I gather you can't do any decision during the spring meeting. And the third part is whether this will be released after Ukrainian elections or before?

MR. MURRAY: There's no hard rule in terms of timeline. So the fact that we issued a press release today doesn't start a specific calendar. We hope at wrap everything up sometime in April. I can't be any more precise about that right now.

What are the outstanding issues? Well, I already mentioned one: finalizing the bilateral, multilateral components of this $27 billion financing package. There are a number of prior actions that the Ukrainian officials have to implement. That means going to their parliament. I believe there was interaction with the Ukrainian parliament today on the program.

So, there's a process underway in Kiev itself that has to fall into place to facilitate, action and discussion by our executive board. I can't rule in or rule out the timeline you described.

QUESTIONER: Will money be released in April?

MR. MURRAY: Assuming the IMF Executive Board approves what's brought to them, there is typically an immediate disbursement. It could be April.

QUESTIONER: Would you say that it is risky for the IMF to get involved in Ukraine, given the very poor track record of the country with the institution?

MR. MURRAY: We've been in discussions with Ukraine for two years, essentially two years. We have a lot of experience in Kiev. The program is proceeding because of the fact that the authorities have voiced commitment. We've consulted widely in Ukraine, across the political spectrum. So we're confident that they're going to move forward. We wouldn't be bringing the program forward if we weren't confident.

QUESTIONER: But there were two previous programs who went off track since 2008.

MR. MURRAY: We bring a program forward, we work on implementation, and that's where we're at right now. We're confident that this program can move forward.

QUESTIONER: So is it not risky for the IMF to get involved?

MR. MURRAY: We're pretty confident that this program can move forward. The Ukraine authorities have voiced, publicly and privately, a keen interest in getting their economic house in order.

QUESTIONER: That was essentially my question. Do you view the Ukrainian authorities as committed to reforms? But, just as a follow-up on something asked earlier, are you able to share at all anything about what kind of loan tranche Ukraine would get when the program is first approved? Because they do have a lot of financing needs coming up by June, and after that, maybe it would be less urgent. So, do you think it could be a bigger chunk of money right at the beginning?

MR. MURRAY: I can't get into details about tranching at this stage, because we've got to finalize that bilateral-multilateral component. But, they have balance of payments needs. But, I can't get into that detail now.

QUESTIONER: Can you please give us a timetable of when the review for Greece is expected to be completed? When the board will convene in order to approve it?

MR. MURRAY: As you're aware, there was a statement issued by the troika last week, which is fairly detailed, and signaled that we're prepared to complete the current review with Greece.

I don't have a specific IMF Executive Board on Greece date at this juncture. But we expect that to be in May. I can't be more precise than that at this state.

QUESTIONER: Can you tell us the amount of money that Greece is going to get? Are we talking about $1.8 billion, or more? How many installments Greece is going to get?

MR. MURRAY: I can't give you a number on that at this stage. Because some of the review has been delayed, there's going to be a re-phasing of disbursements to Greece. It's a common occurrence in Fund programs, when you have gaps between reviews. So there will be a re-phasing. So I can't be precise on the exact amount that will be disbursed when this review is completed in May. But it will be different than the past review.

QUESTIONER: If I may follow up, as you cannot say exactly the amount, will it be higher than just one installment?

MR. MURRAY: I assume it will be higher, because there were gaps between reviews.

QUESTIONER: Yes, we see that Japan has offered for the bilateral. Have you seen other countries? I think Poland is looking at 1 to 5, for $8 billion is possible, bilateral. What other countries have come in for bilateral?

MR. MURRAY: I don't have a country-by-country accounting at this stage. We are still working on the bilateral contributions. It is part of our calculus, in terms of filling the balance of payments needs. But I don't have a complete accounting at this stage.

QUESTIONER: As we all know, the U.S. Congress again refused to move forward with the reform. And my question is, basically, is there a way of moving forward on the reform without U.S. consent?

MR. MURRAY: You're referring to the 2010 Governance and Quota Reforms. For those of you who didn't see the press release we issued on Tuesday, let me repeat what the Managing Director said on Tuesday when the news broke:

"We are utterly disappointed that the necessary legislative steps have not been taken by the U.S. Congress to allow these important reforms to be implemented without further delay.

"Second -- and as we've stated repeatedly -- these reforms will strengthen the IMF's capacity to respond to our members' needs, and help make the IMF's governance more representative of our dynamic membership.

"Without ratification by the U.S., the 2010 Quota and Governance Reforms cannot become effective."

As for what's next, there is further work to be done on explaining why these reforms are important, and what they mean. We have to hope that the U.S. authorities will fully understand the importance of these reforms and give them the high priority they deserve.

We expect this matter will be discussed among the IMF membership at our spring meetings in mid-April. As you know, the IMF Board of Governors has asked IMCF Chaiman, Tharman Shanmugaratnam, Deputy Prime Minister and Finance Minister of Singapore, to consult the membership and to advise on available options for completing the current round of the quota process.

The IMFC, which is our main ministerial body, will convene in Washington April 11th and 12th. IMF Chairman Tharman Shanmugaratnam is expected to report on his findings at that time.

QUESTIONER: Regarding Greece -- so, when you sign off on that statement with the troika, does it mean you have the assurances for the 12-month full financing from the European side? And on Ukraine, when you say that you consulted with, you know, parliament, leaders on going ahead with the program, did that include Mrs. Tymoshenko, since she just declared she was running for president, and that last time she was in power, when the program went off track.

MR. MURRAY: On Greece, the program would not be able to go forward unless we had those assurances. So, I assume once the IMF Executive Board convenes, that question will be fully answered.

On Ukraine, I don't know specifically if Ms. Tymoshenko was consulted by the mission team, but I do know that the mission team met with a wide spectrum of political players. If I get that information, I will follow up with you.

I'm going to read a few questions online, and then get back to the room.

It's again on Ukraine. I'm going to read this out just for the record, because we pretty much answered this. "Can you tell us more about the aid package for Ukraine? Has the fact-finding team returned from Ukraine, and were they given full or, as needed, full access to what they needed to agree on the package?"

The mission is concluded today. We issued a press release, we had a press conference. Members of the mission team are starting to return to Washington.

I have another question. "Do you think that there are possible benefits to be gained if the IMF were to participate in banks' stress-tests in euro zone program countries?"

I don't have anything specific on this. I mean, basically, we endorse the stress-test process that's underway in Europe at the moment. It's important that they continue to do that.

I have another Ukraine question. "On Ukraine, will you provide comment on reports that the 'increase in the price of natural gas for household consumers by an average of 50 percent' is attributable to the IMF?"

You know, if you look at the press release that we just issued a few hours ago in Kiev, there's five key components to the program: fiscal, monetary, governance, et cetera. One of them is energy sector reforms. The authorities are moving to reduce subsidies to their energy sector. Prices in Ukraine are two to three times lower than most of the neighboring countries in the region, so this is one of the things that are going on. I think the mission chief dealt with that, to some degree, earlier.

Another question: "Can we expect the first tranche of aid for Ukraine -- when can we expect the first tranche of aid to Ukraine? How big will it be?" I think I've covered that earlier.

And last question online, and I'll go back to the room here, on Zimbabwe: "Please confirm the IMF is reopening its office, and respond to Fin. Min. Chinamasa saying part of the deal included cutting the wage bill, but this pledge will not be met. 'Addressing it overnight would mean very drastic measures, which I indicated to them, the IMF, I am not prepared to take.'"

I don't have any specific comments on the minister's remarks. The press release that you'll see, that's now public gets into our ongoing discussions with the authorities over a staff-monitored program. Those discussions will continue here in Washington on the sidelines of the spring meetings in mid-April.

QUESTIONER: I have two questions. The first question is a follow-up question about the quota and governance reform. So, we've been seeing the Obama administration is trying to push this reform really hard, but Congress just can't let it pass. So, I just want to repeat the question: Is it a possibility we just do the reform without U.S.? And then, are we going to give them the deadline for that during the April meeting?

MR. MURRAY: I know there has been some official comments, reports, in recent weeks about non-U.S. officials ruminating about that. It's a political decision that would have to be taken, and also would have to involve the United States in some fashion. So those kind of -- it would actually have to involve the United States for that to happen. So I think the best thing to do on that question is to go to the U.S. Treasury, which represents the U.S. interests here at the IMF, and pose that question to them. We wouldn't have any say.

QUESTIONER: So you are aware of ruminations, but not aware of what?

MR. MURRAY: I recall some comments reportedly out of Sidney, in which this came up.

You know, I can't comment. It's really something that's between capitals to resolve. So you really should go to Treasury, and other capitals, to ask them what they plan to do. But Minister Tharman Shanmugaratnam, like I said, is consulting capitals at the moment.

QUESTIONER: I wanted to ask about Venezuela. The government announced a devaluation this week. Do you think, as (inaudible) current imbalances in the country, it would be enough? And, also, do you think they should plan to raise the price of gasoline? That's one of the (inaudible).

MR. MURRAY: I have to underline this: We have not had an Article IV consultation with Venezuela for some time. This is something that we, the Fund, would welcome the opportunity to discuss economic developments and policy priorities with the Venezuelan authorities. And engagement with the Fund in the context of an Article IV would be welcome.

In terms of the current situation, all I can tell you is that, you know, they seem to be facing some significant difficulties. Policy action is urgently needed to reduce imbalances and restore price stability. And -- as the Managing Director has said in the past -- the Fund stands ready to assist the government in enhancing growth and stability.

QUESTIONER: (off mic)

MR. MURRAY: I don't have any specific comments on the fuel issue.

QUESTIONER: Can you most Stan-By Arrangement—- most standard loan programs-- the IMF conducts are three years? This program is specifically two years. And economists say that the Ukraine's financing needs and financing gap will need a longer program than a two-year program to return to health. Can you explain why exactly it's a two-year program instead of a longer program? And, secondly, can you say what Poul Thomsen's involvement in the Ukraine program is? Mr. Thomsen, the mission chief for Greece.

MR. MURRAY: Nikolay Gueorguiev is the IMF Mission Chief for Ukraine.

QUESTIONER: Sure. But does Mr. Thomsen have any involvement in the Ukraine negotiations from the headquarters?

MR. MURRAY: I I'll have to check on that. I need to double-check on that.

On the length of the Stand-By arrangement, typically, it can be anywhere from 18 months to roughly three years. This is basically a discussion that occurs between the government and the mission and us, in essence, in terms of where they think their needs are, and what they need to deliver. So, I think the authorities and the mission just agreed on a two-year program.

QUESTIONER: Sure. But is it appropriate to assume that because the agreement is for two years, that there will not be any external financing needs beyond that two-year program?

MR. MURRAY: Oh, you're getting way ahead of me. YI don't know. I could not possibly answer that.

We'll be discussing. There are debt-sustainability issues, and all sorts of factors come into play. But, you know, we don't do a program now and two years late we'll have another program. It's not the nature of the discussion at the moment. It's really very much focused on $27 billion financing package over the next two years, our coming up with the multilateral and bilateral contributions to sort out our specific part of that package. And that's where we're at right now -- and then the economic commitments and reforms necessary to make that work over the next two years.

QUESTIONER: My question would be, you mentioned that the IMF Executive Board would most likely convene on Greece in May. Does this mean that the next disbursement for Greece will be after the European elections, which are at the end of May? And, if I may follow up with something, as well -- given that the IMF has been traditionally conservative in its estimates, most notably for the primary surplus in Greece that, at the end of the day, was much higher than the original estimate of the IMF, where do you think -- is it because the IMF is more conservative, or was there any other reason for why the primary surplus, according to the IMF estimates, were lower than what happened in the end?

MR. MURRAY: The troika statement dealt with the primary surplus. Let me first take your first question: timing. I don't have anything more specific on timing vis-a-vis Greece, other than we're targeting a board meeting in May. Now, what date is still to be determined. But once we have a board meeting, and the board approves the completion of the review, there is typically a disbursement.

In terms of the primary surplus -- let me just take a quick look. I don't really have anything beyond what's in the public record, which is the troika statement that was issued on March 19th. I assume you don't want me to read again -- but I can read it -- I don't have anything additional to offer on the rationale, the Fund rationale.

But the bottom line is that, as you know, the staff-level agreement that was reached last week on the fifth review under the Extended Fund Facility, entails refocusing structural reforms toward product and service markets, where progress so far has been lagging. The economy is rebalancing and, after six years of recession, is projected to start growing this year. The primary fiscal balance and the external current account are now in surplus, and prices are adjusting, and inflation remains well below the euro area average. The authorities are making progress on reforms, structural reforms, and improving their growth potentials. I think that's where we stand right now. And we'll have more to say when we come to the board in May.

QUESTIONER: May I follow up on that? Does the crisis in Ukraine --

MR. MURRAY: The Board meeting on Greece will be in May. The one for Ukraine will be likely in April.

QUESTIONER: I though you said April, Greece.

MR. MURRAY: Did I? No, I don't -- I said May for Greece, April for Ukraine.

QUESTIONER: That's a big difference.

MR. MURRAY: There's a big difference. We've got a lot of months here to deal with.

QUESTIONER: Do you have enough money for helping everyone who needs help? The beginning now, with the burning need, urgent need for Ukraine, and some urgent needs for other countries, including Greece. So, basically, my question is: Does the crisis in Ukraine prevent you from doing the most effective job of helping others?

MR. MURRAY: Yes, we published our financial reports two or three days ago. You can take a look at that. We're liquid.

I will take a last question -- go ahead -- and we're going to wrap.

QUESTIONER: A question on renminbi. China extended renminbi tradings onto 2 percent last week. Do you see that an efforts to allow renminbi be more market determined?

MR. MURRAY: I think the authorities have talked about renminbi reform for some time. I don't see any change in their strategy as a result of what we saw in the past week.

QUESTIONER: Okay, but we've seen couple criticisms because we see the renminbi has been depreciating since the beginning of the year.

MR. MURRAY: I don't like to get into exchange-rate commentary. We are carrying out an "External Sector Report." That internal review, is currently underway. We call it a "pilot" -- External Sector Report, which gets into exchange rate relativities, will be completed by June, and will be published.

I'm not aware of anything going on right now, in China, renminbi, that I can comment on.

MR. MURRAY: Thank you all. Again, the embargo will be lifted at 10:30 a.m. Washington time, 3:30 p.m. GMT.

Have a good day, and I hope to see you at the Spring Meetings of the IMF and World Bank.

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