Transcript of a Press Briefing by Gerry Rice, Director of the Communications Department, International Monetary Fund

November 7, 2013

Washington, D.C.
Thursday, November 7, 2013
Webcast of the press briefing Webcast

MR. RICE: Good morning, everyone, and welcome to this press briefing, on behalf of the IMF and Gerry Rice, the Director of Communications here at the Fund. As usual, the embargo time will be 10:30 a.m. That's Washington, D.C.

And let me make a few announcements, and then turn to questions from colleagues in the room, as well as online. Let me begin with the travel of the Managing Director, Christine Lagarde.

And tomorrow, November 8, Madam Lagarde will be in Paris, to participate with the leaders of the other international financial institutions in a conference organized by President Hollande, to review the state of the global and European economies.

Madam Lagarde will then travel to the Middle East, to Kuwait, to be specific, for a visit over the weekend, where she will meet with Kuwaiti officials, visit the Kuwaiti training center, and give a speech at the Central Bank Symposium -- a speech that will be released to you.

Turning to the First Deputy Managing Director, David Lipton, will be traveling to Costa Rica the week after next, November 21st, to speak at the 12th annual regional conference on Central America, Panama, and the Dominican Republic. That's November 21st, David Lipton in Central America.

Deputy Managing Director Shinohara will travel to Sri Lanka that same week -- that's from November 17 to November 19 -- to meet the authorities. And from there, Mr. Shinohara will go to Nepal, where he will give the keynote speech at the Southeast Asian Central Banks Governors Conference. And that's on November 21st, also.

Deputy Managing Director Zhu Min will travel to Australia, where he will give the opening remarks at the Australian Business Economists Annual Conference. And from there, he will travel onto the Second Pacific Island Conference at the end of that week -- so fairly busy week there.

Couple of other events -- today and tomorrow at the Fund, there's a major research conference. It's our annual research conference. This year's conference, I think, is particularly interesting, and will honor Stan Fischer, well-known to you all, including in his time as First Deputy Managing Director at the IMF.

Amongst others, Nobel Laureate Paul Krugman will deliver the main lecture, the Mundell-Fleming lecture this afternoon at 4:30. Amongst other participants will be Ben Bernanke, Larry Summers, and, of course, our very own Olivier Blanchard will be leading and participating.

And the wrap-up session is being webcast. The whole event is open to press participation -- though registration is required. That's today and tomorrow, the research conference.

Secondly and finally, the regional economic outlook for the Middle East and North Africa will be launched in Dubai next Tuesday. That's November 12th, and that event will be headed by Masood Ahmed, our Director for the Middle East and Central Asia Department. And that presentation will be webcast live.

With those announcements, let me turn to colleagues in the room.

QUESTIONER: Good morning. Do you have any comment on the ECB rate cut earlier today, and do you see a specter of deflation in Europe?

MR. RICE: We strongly welcome the decision by the ECB today, which we believe can help support the nascent recovery in the euro area. The decision is fully warranted by the weak inflation dynamics and substantial slack in the economy.

On that topic [deflation], it's something that we're watching. Inflation across the euro area has been steadily declining in recent months, with deflationary pressures intensifying in a few countries in the periphery. So, it's something that we're watching, and, the decision from the ECB this morning is helpful.

QUESTIONER: Good morning, Gerry. First question is, what is the status of the talks in Greece? And if you can tell us, when Mr. Thompson is coming back.

MR. RICE: Well, just a step back for the benefit of other colleagues. As you know, the mission team from the IMF and our European partners resumed discussions last Tuesday in Athens, with the Greek authorities. And this is on the economic program's fifth review. In terms of the status obviously discussions have just gotten underway. They're ongoing, and, as usual, the outcome will be communicated at the end of the mission. I do not have a date for you, on the end of the mission, but we'll be keeping you posted as it progresses.

QUESTIONER: According to the newspaper Vima, Mr. Thompson told the Economic Minister of Greece -- and I quote -- "Do not say out there that you will not take any measures, because, simply, you will take them."

Do you have anything to tell us about this? Because some parliamentarians in Greece are asking the government to consider Mr. Thompson persona [non] grata. And the second thing is that Madam Lagarde has said recently that she's not supporting any new measures.

MR. RICE: Look, I think to be fair to the discussions that are taking place on the ground, we shouldn't speculate on what might or might not have been said, because it's just that; it's speculation. And I really think we should respect the discussions that are ongoing, and let the participants in those discussions do their work. So, I'm not giving credence to reported comments.

But, as I said, the IMF team and the European partners are now on the ground. They're having the discussions. They're assessing the budget, and we will have to see what comes from that assessment. And this will show the amount of measures needed to meet the agreed targets.

QUESTIONER: Good morning. Following up on that idea, the anti-euro sentiment that seems to be rising in France, and Italy, and Greece, and Portugal -- what concern does the IMF have specifically for that in Europe? Is it something that's on the IMF's radar? And secondly, if it is concerned, what is the IMF doing about it in terms of communications with Germany, et cetera?

MR. RICE: Well, you know, our role, our mandate is a focused one. And we're focused on the macroeconomic stability and the financial stability of our membership, including in the euro area and the countries of the euro area.

So, we've been working with our European partners to that end, and that's what we're focused on. And we think the most valuable contribution that we can make to the eurozone and to developments there right now is to help support that macroeconomic and financial stability, to get the growth going again, to restore jobs. We are beginning to see some fledging signs of recovery – [but there are] still strong headwinds to be faced. And, you know, we're committed and focused on that effort.

QUESTIONER: Good morning. On that, I understand your mandate is a focused one, but given the political violence that recently – with a terrorist or a hit against Golden Dawn in Greece -- some reports in the Greek press [say] that a Troika member may be targeted by a terrorist group -- are you concerned for the safety of your mission in Greece, and are you taking any measures to protect them over there?

MR. RICE: The mission is proceeding as planned. We obviously watch all developments, but we're focused on the objective, as we have been all along. And that is to help support the Greek government, to help Greece get back on the path of growth and employment, and to, you know, help the people of Greece to emerge from this very difficult crisis and situation they've been facing for several years. That's our focus -- and let me leave it there.

QUESTIONER: According to recent reports, the Obama administration asked the NSA to stop spying on the IMF and the World Bank Headquarters. Are you worried that this could have happened, and did you get any assurances from the administration that those practices have been stopped?

MR. RICE: I've seen that report, but, I don't have any comment at this stage.

QUESTIONER: You're not concerned that the IMF Headquarters could have been spied on?

MR. RICE: As I said, we've seen the report. I think it was a news report, and I don't have any comment at this stage.

QUESTIONER: I wanted to ask about Egypt. The IMF's team was in Egypt last week. The government said it was for technical discussions about the VAT, but I was wondering if you also discussed any loan program, or if you could give us some more details about how that meeting went?

MR. RICE: Let me say a couple of things in response.

We remain strongly committed to support Egypt during this difficult transition. We look forward to constructive policy dialogue, and we are ready to engage, as soon as the Egyptian authorities wish to advance our common understanding of the current economic situation.

On your specific question about the mission, yes, I can confirm that, at the request of the Egyptian authorities, a technical team paid a short visit last week to Cairo, to discuss the authorities' plans on tax administration and policy.

QUESTIONER: (Inaudible)

MR. RICE: I don't have the details of that, but just to confirm that, indeed, the mission did take place.

QUESTIONER: And then the second question was about Ukraine. The mission concluded. We all read the statement, but it seems like there were maybe some things left unsaid. And now the government is also discussing reducing subsidies for Naftogaz, without affecting any of the population.

So, I was wondering if you could give some more details. Is Ukraine still negotiating for a program? Is there any timeline on that?

MR. RICE: Not a great deal more to offer. As you indicate, just looking at it, the statement a few days ago at the conclusion of the Article IV was pretty comprehensive. But what I can say is that, you know, the discussions after that mission, which had just taken place in the second half of October -- the discussions between the staff and the Ukraine authorities continued, with a view to ensuring that policies are sufficiently ambitious to address Ukraine's challenges. And maybe one further piece of information for you: Our executive board will meet to discuss this Article IV consultation. That's tentatively scheduled for mid-December.

Now, again, the mission statement is pretty comprehensive, quoting -- it says, "The mission and the authorities consider that a set of comprehensive and credible reforms is needed to address vulnerabilities and revive growth."

And then it concludes -- quoting again -- "The mission emphasized the need for the authorities to make significant progress in all of the above policy areas." And they're laid out, I think, with some degree of detail in that statement.

So, discussions continue, and we'll keep you apprised.

QUESTIONER: Good morning. Does the IMF management consider that Argentina has made enough progress on working on its CPI and its data, compared with the last time it made a recommendation to the board?

MR. RICE: Okay, so, just stepping back a bit, for the benefit of others -- as you know, the IMF's Executive Board has called on Argentina to adopt remedial measures to address the inaccuracy of inflation and GDP data. To answer your question, as per the board decision, the Managing Director is required to report to the board by November 13 this year -- that's very shortly -- on the status of Argentina's implementation of the remedial measures. And, at that time, on the basis of the report, the board will again review this issue and Argentina's response, in line with IMF procedures. So, November 13 is the date for submission of the report. I do not have a date yet for the Board discussion of the report.

QUESTIONER: But can you give us an assessment of what Argentina has done so far? Because I think from here, it's not very clear what it has done.

MR. RICE: I don't want to preempt the report. But [maybe as way of background let me add that] Fund staff had constructive discussions with the authorities on their efforts to improve official data on the consumer price index and the GDP, including technical exchanges on the authorities' ongoing development of a new national consumer price index.

I'm going to leave it there, because I don't want to preempt the report that's going to the Board November 13, and then the Board's discussion of that report.

QUESTIONER: Please forgive me, but with all due respect, on the NSA, I know you said twice now you will not have any comment. But I would not be doing my due diligence as a reporter if I did not say that the accusations of the U.S. -- and admissions, essentially, by the U.S. -- of spying on the International Monetary Fund -- for the Fund to have absolutely no comment as to whether it has received assurances, has confirmed those reports, has any concerns, I'm just a little bit dumbfounded by. So, I just might encourage you to, if you have any change of thoughts on that, if you could reach out to us as soon as possible.

Secondly, on Spain, if there are any bank recap needs, will that go on Spain's balance sheet -- the government's sovereign debt balance sheet -- or will there be some sort of financial slight-of-hand that makes it -- poof -- disappear from their sovereign debt balance sheet?

MR. RICE: I won't get into the details of that -- but maybe just to tell you we've been partnering with the Europeans on the monitoring of the financial sector in Spain, and we will have the fourth report coming out just very shortly, on November 21. That's about all I have on that issue right now.

QUESTIONER: Can you comment on the recent killings of the members of this Nazi organization, Golden Dawn? It seems many in Europe believe that this situation is a result of the austerity.

MR. RICE: You know, we are obviously following developments, but I don't have a specific comment on that.

QUESTIONNER: [The IMF’s First Managing Director David] Lipton gave an interview talking about a precautionary credit line for Ireland, and said that the IMF was supportive of this, even though you've said you haven't decided, and the government hasn't decided yet. So, I was wondering if you could clarify that.

MR. RICE: We had a press conference call on Ireland about half an hour ago, and the press release is imminent, so I'm going to just say, let's wait until then, okay?

QUESTIONER: If I could go back to the ECB -- now that the maintenance rate has been lowered, do you see any room for further action from the ECB?

MR. RICE: Well, we think the decision taken by the ECB today is very helpful. I think they just made the decision a short time ago. I think we should just take this step by step. Maybe just to reiterate what I said earlier that the recovery is fragile, and the outlook remains challenging. So, I think the agenda that the eurozone and the Europeans have been pursuing needs to be continued and implemented strongly in the period ahead. I'm looking online, but the questions were on Argentina and on the Ukraine, and I think we've managed those.

QUESTIONER: Just if you can tell us something on Cyprus.

MR. RICE: On Cyprus, there was a conference call, like Ireland. There was a press conference call just a short time ago, and a press release, I believe, has just been issued -- or is about just to be issued. I think anything you want will be there, okay? So, I don't want to parse it.

Okay. With that, let me thank you for coming, and see you in a couple of weeks' time. I hope you get a chance to get to the conference today and tomorrow. Thank you.

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