Transcript of a Press Briefing by David Hawley, Senior Advisor, External Relations Department, International Monetary Fund

July 21, 2011

Washington, DC
July 21, 2011
Webcast of the press conference Webcast

MR. HAWLEY: Hello, everyone, and welcome to our regular briefings. I’m David Hawley from the IMF’s External Relations Department. As usual, the briefing is under embargo, and the embargo time is 10:30 Washington time, that’s 1430 GMT.

Before going to your questions, let me make as usual a few housekeeping remarks. As we speak, the IMF Managing Director, Christine Lagarde, is participating in the summit of European leaders in Brussels. At the conclusion of the summit, we expect she’ll have some media availability, and we’ll keep you posted on that as it’s firmed up.

Looking forward to next week, on Tuesday the 26th, the Managing Director will be delivering a speech at the Council of Foreign Relations in New York, on the challenges and opportunities for the world economy and the IMF. If you’re interested in attending the speech, which is open to the media, contact the Council of Foreign Relations for registration details.

On the same day, July 26, David Lipton will start at the Fund. He will be the Special Advisor to the Managing Director initially before taking over his announced responsibilities as First Deputy Managing Director on September 1. And also on July 26 as previously announced, Min Zhu will take up his position as Deputy Managing Director.

On management travel, Deputy Managing Director Nemat Shafik will take part on July 28 and 29 in the Tenth Annual Conference on Central America, Panama, and the Dominican Republic, which this year is being held in Managua, Nicaragua. The Fund’s Economic Counselor, Olivier Blanchard, and the Director of the Western Hemisphere Department, Nicholas Eyzaguirre, will also take part in the Conference. We expect there will be press availability around this, so we’ll give you details on that.

You may know that the Board goes into its annual recess shortly; that this year will be from August 1 to August 19. And in the lead-up to the recess, there’s a lot of activity in the Board, and I’ll flag some of the major items so that you’ve got a note of them. The U.S. Article IV is today, and we expect we’ll have publication next week. The Article IV for Colombia was yesterday, and we’ll have a conference call for the media tomorrow on that; that’s Friday the 22nd. The Board meeting, the Article IV Consultation on Spain is tomorrow.

And next week we’ll have the Article IVs on France, South Africa, the U.K., Mexico, and Republic of Korea. So, as I said, there’s a lot coming up in the Board next week, and we’ll keep you posted on publication of the documents and, where relevant, media availabilities.

And a final point, press registration for the annual meetings will open on July 25 on the IMF Web site. And our next briefing, because we also take a little pause, will be on August 18. So with that I’m open for questions.

QUESTION: I was wondering what Christine Lagarde’s role is going to be in Brussels. I mean where she sees her role and what basically the Fund’s tactic will be.

MR. HAWLEY: She is participating in the summit, and she’ll have a press availability I expect later in the day. So you’ll be able to ask her exactly what she did. But in terms of the Fund’s input, which I think is what you’re also asking about, we actually made quite a clear statement on that a couple of days ago in the context of the Euro area Article IV and as a part of the PIN, the statement made after the Board discussion that I draw your attention to. And that is a statement on behalf of the whole membership.

“Directors urged a comprehensive and concerted approach for effectively addressing the sovereign debt crisis. They also said that strong implementation of existing commitments should be supported with adequate financing on terms supporting debt sustainability and private sector solutions to banking problems.” And they also had a number of specific policy recommendations at the Euro area level that I refer you to for the PIN on details.

QUESTION: Regarding Greece, you recently said that you were not considering a new rescue package for Greece, that you haven’t received any request for additional help. I wonder if that has changed. Thank you.

MR. HAWLEY: Let me say two things. We have a very close relationship with Greece, an intensive relationship, and this is a deep and constructive engagement that is cemented by a program which has two years to run. Greece is at the center of today’s discussions in Brussels, so I have nothing fresh to offer you on the specifics of our relationship with Greece from what Poul Thompson said on July 13, relatively recently.

QUESTION: The Greek Finance Minister will be here on Monday, and he’s giving a speech at the Peterson Institution and then he’s coming here. What are those discussions going to be about?

MR. HAWLEY: Well, I can confirm that the Managing Director is going to meet Minister Venizelos on Monday. This meeting was scheduled at the request of the authorities, but I’ve got no guidance or view at this stage on what the content of the discussions might be.

QUESTION: Just to follow up on two questions, and forgive me for being a journalist and asking a question that you have already answered.

MR. HAWLEY: In that case you’ll probably forgive me for repeating the answer I already gave, but go ahead.

QUESTION:: Yes, I just wanted to make sure I’m understanding what you are and what you are not saying. You said or the IMF has said just in the past few days, including the Managing Director, that there had not been a request from Greece for a second package. When you say that there is nothing new that you can tell us, does that mean that there has been no change in that particular status or are you indicating by that that you know there may have been a change in status, but you just don’t want to tell us?

MR. HAWLEY: Okay, I’m happy to say, since you have asked for precision, that the Greek authorities have not requested a new program from the Fund.

QUESTION: And if I may just follow up on another question. Thank you for that clarification. The IMF has in some quarters been criticized for its junior role in at least publicly making or not making recommendations to the Euro group as to a solution to both the Greek sovereign debt crisis and the wider Euro sovereign debt crisis. And I’m wondering if Madame Managing Director has decided to take a more proactive role -- I know you’re going to point me to the press conference this evening -- but can we view the greater public discourse last week from the Euro Article IV as an indication of a more proactive recommending role?

MR. HAWLEY: I think what I’m going to point you to is the statement itself, the Euro area statement, which speaks about the very close relationship of the Fund with Europe and close involvement with all the countries in that region. You know, that speaks for itself. The Fund has a deep relationship with Europe. The statements contained in the PIN have very clear recommendations on the policy. I think that speaks for a close relationship.

I’ll turn if I may to a question from the Media Briefing Center, about the departure of the state bank governor and how the Fund will react to this matter. We had a very good relationship with the outgoing governor, and we look forward to continuing a close relationship with his successor.

And another question, “with South Sudan now a U.N. member, what’s the IMF’s program there and what’s the comment on currency war talk from Sudan?” Well, as you know, South Sudan has applied for membership at the Fund. That was an announcement made on April 20. Concerning our involvement on currency issues, earlier this year the Fund provided technical advice on currency issues, including options for an exchange rate regime and on a road map for the orderly introduction of a new currency.

Things have, of course, moved on since the time of that technical assistance, advice, and we have not been involved in the launching of the new currency announced this week. But going forward we, of course, stand ready to assist the government of South Sudan in strengthening its capacity to deal with currency issues and manage its monetary policy. In the context, of technical assistance at this stage, I should underline, since it’s not a member. For those of you not familiar with the system here, it’s possible to provide technical assistance to a country which is not a member of the Fund. I don’t have a specific comment on currency wars.

And from Argentina, whether Madame Lagarde last week had a telephone conversation with President Kirchner and if so, “could you tell us what the contents of that conversation were?” Well, I can confirm that there was a conversation between President Kirchner and the Managing Director. I’ve got no details on content, but would note there’s nothing unusual in contacts between the Fund Managing Director and a head of government in any of our countries..

QUESTION: Can you elaborate on the discussions over adding Min Zhu as the fourth Deputy Managing Director and any disagreements and what role is he expected to play in the Fund?

MR. HAWLEY: I’ve got nothing to add to the statement that the Managing Director made announcing his appointment a few days ago.

QUESTION: Do you want to make any comment about the potential involvement of the public sector in a potential restructure of the Greek debt?

MR. HAWLEY: I’ve got nothing to add at this stage to what we said a couple of days ago in the context of the Euro area statement, and I don’t want to anticipate what might come out later today from the summit in Brussels.

QUESTION: I’ve got two questions, two different topics. Back to Greece, is the IMF -- if the conditions from the Europeans are met in what you’re asking them to do, is the IMF ready to give, to lend, more money to Greece? Completely different topic, could you give us an update on the investigation on the hacking?

MR. HAWLEY: Sure. I’ve got nothing on your first question. It’s hypothetical, and I’m not going to go there.

QUESTION: Not really. That’s what they are discussing in Brussels today.

MR. HAWLEY: Well let’s wait for what comes out of Brussels before commenting on your question.

On the cyber attack, not much fresh. We’re continuing to investigate what happened and assess what was accessed. In response naturally we’ve taken a number of steps to strengthen our information security and to protect our computer network, and we’re anticipating taking further measures in light of what the investigation might show. You’ll forgive me if I don’t describe what those measures might be.

QUESTION: Just to clarify, so because you really don’t have much to expand other than the measures that IMF is taking to better protect itself, am I to rightly assume that there’s been no real progress in the investigation?

MR. HAWLEY: No, you’re not right to assume there’s no progress. What I said is that we’re continuing the investigation. I’m not at this stage giving you too much information beyond that.

QUESTION: Just a quick follow up, so the conversation between the Managing Director and President Kirchner happened last week?

MR. HAWLEY: I’m afraid I’ll have to come back to you on the specific date. I don’t have it in my head.

QUESTION: And regarding the press conference tonight, how is that going to work? Is it going to be a physical press conference with hearing and then we’ll be able to dial in or how is it going to work?

MR. HAWLEY: You’ll have to be patient. We’ll let you know as soon as the details fall into place, but don’t worry. You or your organization will be able to follow it.

QUESTION: There’s a donor conference on famine in Africa. I was wondering if the Fund has a role to play in that? I mean, clearly Somalia and these countries are in arrears to the Fund, so doesn’t really have a role there. But there are budget issues and so on in Kenya and I guess Ethiopia. Just to clarify what the Fund’s role would be in this.

MR. HAWLEY: I’m going to have to get back to you on that, but we’ll add it broadly in some fashion so that that question’s properly answered.

QUESTION: Are you stuck on your prior IMF official statement about the restructure of the Greek debt that there’s not a solution? You remember these statements?

MR. HAWLEY: I’ve got nothing to add to what I and we earlier this week have said on Greece and invite you to see what comes out of Brussels.

I’ve got another question from the Media Briefing Center: “the contact group on Libya now says that the Transitional National Council is the legitimate government. While not an IMF member, could the IMF provide technical assistance to the TNC?” Well, at this stage the role of the Fund is to closely monitor developments, and we stand ready to engage further as soon as conditions allow. But there isn’t anything fresh on contacts on Libya.

QUESTION: While we’re in the region, let me just follow up on Egypt. We know that Egypt has said that they do not want a Fund program. The question is then how does the Fund proceed with Egypt? d I was at an event yesterday at the World Bank on the Middle East and the discussion with the private sector -- you know, Citigroup, all those -- was that this was a move more against institutions like the Fund rather than they don’t need the money. But was wondering what your reading was? I know it’s difficult for you to analyze it on camera, but how do you see the move? I mean, what is your interpretation of it?

MR. HAWLEY: Well, on camera? It would be the same as off camera, is that we look forward to maintaining our close and constructive relations with Egypt, including with the new Cabinet.

QUESTION: I’m also going to come back to the Min Zhu question because it wasn’t clear from the press release what exactly he was going to do, and I think that’s what the question also was about. And each of your Deputy Managing Directors all have specific areas, and it was not clear in that news release.

MR. HAWLEY: Okay. –That’s a fair question, but at the moment I don’t have a specific answer. But you’re right to say that the Deputy Managing Directors, including the First Deputy Managing Director and the now three Deputy Managing Directors, have specific roles. They, for example, each have a country portfolio, a set of countries that they follow, and their nationality is not a guide to the countries that they may be responsible for. And they also have operational responsibilities for issues like the budget, the Fund finances. And as the new management team gets into place, we’ll try to make it clearer who does what in the management team. Thank you very much. So the briefing is embargoed until 10:30, and we’ll see you on August 18. Thanks a lot.

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