Transcript

Thursday, June 3, 2010

MR. HAWLEY: Good morning, ladies and gentlemen. I am David Hawley from the IMF’s External Relations Department and welcome to another of our regular briefings for the media. As usual, this briefing is under embargo, and today’s embargo expires at 10:30 Washington time; that is 1430 GMT. Before turning to questions, let me make, as usual, a few housekeeping remarks.

The Managing Director, Dominique Strauss-Kahn, will be in Busan, South Korea this week for the meeting of the G-20 Finance Ministers and Central Bank Governors.

Following that, he will, on June 7, take part in the conclusions of the IMF mission to the Eurozone at the Euro Group Meeting in Luxembourg. I should note here that in this context he is replacing Mr. Marek Belka, who, since his nomination as Governor of the Central Bank of Poland, is stepping down from day-to-day duties as head of the IMF’s European Department.

On June 10, the Managing Director, Mr. Strauss-Kahn, will attend the Sixth Meeting of the Investment and Advisory Council in Istanbul.

Then he will travel to Israel for a constituency meeting of the IMF. A constituency meeting is where the member countries of a constituency on our Executive Board meeting periodically to discuss matters of common interest.

The Deputy Managing Director, Mr. Shinohara, will be in Vietnam to attend the World Economic Forum on June 6 and 7th and then will travel to Singapore where he will speak on the global economy in Asia at the public lecture session jointly hosted by the Lee Kuan Yew School of Public Policy on the monetary policy of Singapore.

Then finally, on June 10 and 11th, Mr. Shinohara will be in Indonesia where he will join the Article IV consultation meetings with the authorities in Indonesia.

And with that, I’ll turn to questions. Thank you very much.

QUESTIONER: I’m trying to find out on the Fund, what is the IMF pushing for at the Busan meeting? What is the outcome or the progress that the Fund wants to see?

MR. HAWLEY: I’d highlight two things. We will repeat our call for well coordinated policies and the need for countries with fiscal challenges to pursue credible and tailored fiscal adjustment, and for countries that have space to continue to support demand, to do so in the interest of both domestic and global growth. Countries will need to work on growth friendly fiscal reforms. It is very important that the twin pillars of fiscal consolidation and growth be addressed together.

The second point I’d highlight is that we will present a revised draft of our report on financial sector taxation. As you probably know, this report is going to the G-20 leaders at their summit in Toronto on June 26 and 27th.

QUESTIONER: Can I just have a follow-up on that? The one is -- and I see Tim Geithner used that phrase as well, “the growth friendly,” which he said was from the IMF. The growth friendly fiscal reforms, what does the IMF actually mean by that?

MR. HAWLEY: Well, the Managing Director, as you note, has said that the aim is to foster reforms that will help support growth -- and this will be key. In general terms, this means reforms of goods, labor and the financial markets to boost potential growth. This is critical.

QUESTIONER: On the financial tax, a revision of the proposal from April is going to this Finance Minister’s meeting, and then a formal proposal will go to the leaders to be approved?

MR. HAWLEY: It will be for the leaders to decide what they wish to do with the IMF’s contribution to this policy discussion.

I’m going to take an online question from Ukraine. At what stage are the present talks with the country about a new tranche and what questions are not adjusted yet?

President Yanukovych and the Managing Director, Mr. Strauss-Kahn, spoke only yesterday about economic developments in Ukraine and the recently released economic reform plan. They agreed that Poul Thomsen, who is the Deputy Director of Fund’s European Department, together with the Mission Chief for Ukraine, Mr. Thanos Abinites, will visit Kiev next week to meet with senior officials both regarding the economic policies that could be supported by a Fund program. However, I don’t have specific dates at this stage to announce for a negotiating mission. We expect that these will be discussed during the visit next week.

And I have a question online concerning Italy, they ask about our response to the budget law for 2010, 2011. I can really say only that we welcome any measures, and I don’t have more to add at this stage.

QUESTIONER: Let me just go back to Ukraine. So is the idea to go? Just last week the IMF was saying that the authorities had not gone far enough on budget targets with Ukraine. So is the idea to try and narrow those differences during this mission and reach an agreement? Or is the mission just to go there, to try and narrow the difference, come back and we’ll keep working on it?

MR. HAWLEY: At this stage, I would prefer a more general response to that question. They’re going to meet to discuss economic policies that could be supported by a Fund program.

QUESTIONER: The Central Bank Governor of Pakistan has resigned, and this is just two days before the budget. I was wondering whether you think that this could cause problems for the implementation of the IMF program.

MR. HAWLEY: The departure of Governor Raza, with whom we have had very productive cooperation, will not make a difference to the implementation of the program, and we look forward to working with his successor.

Another online question about when the report on financial sector taxation will be available and will we have access to the report prior to the summit. Since this is a report submitted to a group of the membership, the G-20, publication is not entirely in our hands. So that remains to be seen.

QUESTIONER: The other question I wanted to follow up was the other issue to be discussed at the G-20 is the Mutual Assessment Process of rebalancing the economy. And that’s going to be discussed at the Finance Ministers. How far do you think -- what happened in April, as you know, was there to pare down the optimism and come up with more realistic forecasts. How far has the Fund got in that and do you expect something to be finalized in Toronto?

MR. HAWLEY: I’m not going to anticipate what comes out of Busan on this. The Managing Director will have media availability, and I’d prefer, in the light of the outcome of the Finance Ministers and Central Bank Governors meeting, for him to describe progress in this area.

QUESTIONER: On Greece, is there any further on a mission going? I know that there was a mission, discussion for a mission in July. Anything earlier?

I think there was also a technical mission there at the moment or has just left.

MR. HAWLEY: Yes, I can update you on Greece. The emergency financing mechanism, under which the program was activated, , requires regular staff visits, and in that context an IMF mission will be in Athens from June the 14th to June the 18th.

But let me underline this is an interim review mission, meaning that there’s no disbursement of financing linked to this mission. The team will discuss with the authorities recent developments and implementation under the program.

QUESTIONER: I’d like to turn to Thailand. I was wondering if you have anything for us on the situation in Thailand, following the violence. Does the Fund think that this has caused heavy economic damage? Is there a consultation going on at the moment at all with the authorities?

MR. HAWLEY: Our view is that the political tensions have had little impact on the economy which has been recovering strongly from the global recession.

We have agreed with the authorities that a team will visit Bangkok in early July to hold discussions under the Article IV consultation, the regular annual consultation. The last Article IV, for your information, was completed in May of last year.

QUESTIONER: Just want to clarify. That’s an Article IV that’s going to be conducted?

MR. HAWLEY: Yeah, that’s the Article IV mission.

QUESTIONER: For 2010?

MR. HAWLEY: Yeah, in Thailand. Thank you very much indeed. With that, I’ll conclude this. Good-bye.