Transcript of a Press Briefing by Gerry Rice, Director, Communications Department

IMF News, July 23, 2015

Source details

Canonical URL: Transcript of a Press Briefing by Gerry Rice, Director, Communications Department

Managing Director Christine Lagarde to hold a virtual press conference via the Online Media Briefing Center on Wednesday, July 29 at 9:15 a.m. D.C. Time.
External Sector Report to be released on Tuesday, July 28; First Deputy Managing Director David Lipton to hold a conference call on that release.
Several Article IV reports forthcoming, including Japan (already released that morning), China (early next week), and the Euro Area (dates/timing to be circulated by Media Relations).
Management travel: Deputy Managing Director Mitsuhiro Furusawa in El Salvador for a Central America / Panama / Dominican Republic conference.
IMF resident representative (resrep) office maintains a small presence in Athens.

Timing, modalities, and process for an IMF mission to Greece remain to be decided; IMF has not been on the ground in Greece for some time and will undertake essential technical due diligence before updates.
Staff rotation: Delia Velculescu will succeed Rishi (Mr. Goyal) as part of a standard professional rotation.
Preconditions for IMF participation or a new IMF program:
- Sufficient progress to assess policy reforms (commitment and implementation); and
- Financing with a high probability that debt will be sustainable over the medium term.
IMF stance and procedures:
- IMF stands ready to support Greece and partners but would need a formal request from the Greek authorities to negotiate a new program.
- IMF participation would be contingent on a “balanced approach” — reforms plus financing/debt relief.
- IMF did not support the proposed temporary exit option.
Repayment extensions and arrears:
- Greece repaid outstanding amounts and is current with the IMF; therefore requests for extension of repayment are “probably moot” because Greece is not in arrears.
Clarifications:
- No confirmation that IMF will or will not participate in the first review of the European program; modalities to be decided.
- The ESM three-year program figure of “86 billion euros over three years” was mentioned in discussion; IMF has no present allocation breakdown or commitment figures.

IMF position: debt relief is required for an effective support program for Greece — IMF has laid out options in the DSA but has not recommended a specific approach; a specific concrete commitment on debt relief would be needed from European partners.
IMF participation would depend on concrete commitments on debt relief as part of the financing package.
Any new or additional IMF financing commitment would require approval by the IMF Board.

The SDR review (Chinese request for the renminbi to be included in the SDR basket) is progressing:
- Informal board discussion toward the end of July.
- Formal board discussion expected toward the end of the year, “probably in November.”
Key assessment elements include financial market reforms in China, renminbi internationalization, capital market development, and market liquidity considerations; short-term market volatility is not the deciding factor for the SDR decision.

IMF Board meeting tentatively scheduled for July 31, subject to verification of the last prior action and avoidance of policy reversals.
IMF expects Ukraine and its creditors to make significant progress toward an agreement in line with the memorandum of understanding before the review; ad hoc creditor committee and authorities showed progress in joint statements on July 1 and July 15.
Ukraine currently current on payments; the Fund declined to speculate on specific upcoming payment events prior to July 31.
IMF notes the distinct circumstances of Ukraine and Greece and that debt sustainability and restructuring considerations differ by country.

Pakistan: Mission for the 8th review scheduled to start work on July 29 and run until August 7.
Brazil: Government cut its 2015 fiscal target from “1.2 percent” to “0.15 percent”; IMF frames this against a deeper recession affecting tax revenue and emphasizes continued measures to strengthen the primary fiscal balance and restore fiscal sustainability.
Jamaica: IMF “welcomes” Jamaica’s proactive debt management and supports the buyback; Jamaica recently completed the 8th review and the transaction supports a downward trajectory for public debt.
Cyprus: IMF team in Nicosia discussing policies to complete the 8th review; team expected to end its visit on Friday, July 24. Recent return to growth in Cyprus noted as positive evidence that reforms are bearing fruit.

Any new IMF financing would require a formal request from the member country and Board approval.
The External Sector Report (release July 28) will update IMF assessments on exchange rates and current account imbalances, including previous IMF assessments regarding German competitiveness.
Staff reports and Board discussions will be the vehicle for formal IMF assessments and decisions (e.g., Ukraine staff report to be published following Board consideration).

July 23, 2015 — date of the briefing.
Embargo lifted at 10:30 a.m. Washington, D.C. Time.
Managing Director virtual press conference: Wednesday, July 29 at 9:15 a.m. D.C. Time.
External Sector Report release: Tuesday, July 28.
Pakistan 8th review mission: July 29–August 7.
Cyprus IMF team visit end date: Friday, July 24.
Ukraine tentative Board meeting: July 31.
SDR formal board discussion: toward the end of the year, “probably in November.”
Brazil 2015 fiscal target revised from “1.2 percent” to “0.15 percent.”
ESM program size referenced in discussion: “86 billion euros over three years.”

Transcript of a Press Briefing by Gerry Rice, Director, Communications Department — July 23, 2015