Transcript of a Press Briefing by Caroline Atkinson, Director, External Relations Department, International Monetary Fund

November 4, 2010

November 4, 2010
Washington, DC
Webcast of the press conference Webcast

Good morning, everybody. I am Caroline Atkinson, the Director of the External Relations Department at the IMF.

To start with I will mention as usual some of the upcoming issues that we will be dealing with here and travel abroad. The Managing Director and the First Deputy Managing Director will be traveling next week to Seoul for the G-20 Leaders Summit, and the Managing Director will continue on to Yokohama for the APEC Leaders Summit.

Here in the Fund, the Board election that was delayed in the summer is now underway. A resolution allowing that election that did not pass in the summer has now been passed just yesterday, and we expect the results of the election to be available towards the end of November.

So now we turn to your questions online and in the room. As usual, please identify yourselves and others, and your news organization.

QUESTIONER: What is your take about Ireland? Have you been in touch at all with the authorities? It looks like the ECB has to buy more and more bonds. It looks like investors are not taking into account the fiscal efforts Ireland is doing, so what is your assessment of the situation, and have you been in talks with them at all?

MS. ATKINSON: As you mentioned, the authorities have been taking important fiscal measures. They actually began the fiscal adjustment fairly early in 2009 to 2010, but they have recently announced a further large fiscal adjustment equivalent to about 9 percent of GDP to take place over coming years. We think what is important is the implementation of that adjustment, which, of course, will support their underlying fiscal position.

QUESTIONER: You did not answer my other question. Have you been in touch with them about any financial help?

MS. ATKINSON: No, we have not been in touch with them about any financial help.

I have a question saying, “What is your reaction to yesterday’s announcement from the Federal Reserve regarding its plan to purchase an additional $600 billion in bonds? And also what is your view on the ECB’s decision to hold policies steady?”

Just to deal with the ECB decision, it seems perfectly appropriate for monetary policy in Europe to remain accommodating for the time being. On the Federal Reserve question, we believe that this action shows the Fed’s commitment to support the economy and the recovery and, in particular, to avoid the risk of long-term deflation or a lowering of long-term inflation expectations. We expect that it will have a positive impact on the economy, although that may be modest.

I have another question online: “Dear Caroline, there is speculation in Islamabad that the IMF’s next tranche is in jeopardy as Washington is not supporting Pakistan now. Is this impression correct?”

Well, as you know, we will have support for Pakistan depending on agreement on their policies, and there is a mission in the field now which is discussing Pakistan’s policies under the standby review. We have already some weeks or possibly even a couple of months ago provided an emergency loan to Pakistan in response to the impact, the terrible impact, of the floods there. The discussions are, of course, in the field are ongoing. These discussions about what needs to be implemented for the policies, for the authorities to meet their economic stabilization and reform agenda. And so I am not going to comment on where we stand in relation to their policies.

QUESTIONER: I have another question. What is the IMF reaction to the Icelandic plans of, you know, debt relief or -- we don’t know yet the details, but could that jeopardize IMF help?

MS. ATKINSON: I am not aware of any problems in our relations with Iceland. And, as you know, we moved forward fairly recently in the board, and I believe that’s on track. We’ll get back to you on that one if there’s any news on that.

I have a question about Zimbabwe. Can I “confirm that an IMF mission is currently in Zimbabwe and when are they likely to finish their work?”

I can confirm that there is an IMF mission in Zimbabwe, but it is a staff visit to look at the budget. It’s not a full-fledged Article IV, and I expect that they will finish their work fairly soon. When they do, we will update you.

QUESTIONER: About the G-20, my understanding is that the U.S. proposals or the agreement to look more at deficit or surplus in current accounts would be incorporated into the IMF report, the MAP, for the G-20. Where does that stand or what’s the progress on this? Is there any talk of targets with numbers to be in the MAP?

MS. ATKINSON: No. Well, of course, the Leaders Summit is taking place next week, and so I think we need to look for then and beyond to see what the agreements are about what can be contained in the mutual assessment process of the G-20. That process is where I think the G-20 will be looking for support for a collaborative approach to global imbalances.

I have another question online, which says, “Given the ongoing humanitarian situation in Pakistan, please explain and comment on the report that the IMF has turned down Pakistan’s request to exempt the textile sector from reformed general sales tax.”

And just to repeat, that discussions on the specific measures for Pakistan are ongoing. There’s a mission in the field so I’m not going to comment on particular issues.

QUESTIONER: Is there going to be anything beyond the precautionary credit line and the flexible credit line at the G-20 since there having been talks of creating the global safety net?

MS. ATKINSON: Again, I wish that I could predict fully the outcome of next week’s Leaders Summit, but I guess if I could then they wouldn’t need to be meeting anyway. And I think that we’ll have to wait and see what there is in the Communiqué.

On the Iceland issue, that is a mission for the standby review. Okay, thank you very much, embargoed until 11:30, 1530 GMT. Thank you.


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