Transcript of a Press Briefing by Bill Murray, Deputy Spokesman, External Relations Department, International Monetary Fund

November 16, 2012

Washington, D.C.
Thursday, November 15, 2012
Webcast of the press briefing Webcast

MR. MURRAY: I’m Bill Murray from the External Relations Department of the International Monetary Fund. This is our latest regular press briefing here at IMF Headquarters in Washington. This briefing is embargoed until 10:30 a.m. That’s 3:30 p.m. GMT.

Let me just do a couple housekeeping items, then I’ll take questions from journalists here in the room and from you via the Press Center.

The Managing Director, Christine Lagarde, is wrapping up her visit to the Philippines tomorrow. I expect that there will be a press release issued at the conclusion of her visit to the Philippines. That will come out roughly around 5 a.m. Washington, D.C., time Friday. Media Relations will be available to answer any further questions you have on that.

Then we have a couple of other things. Today we’re going to be releasing new data under what we call the Coordinated Portfolio Investment Survey. The survey is an important element of the Fund’s efforts to better understand and analyze financial interactions globally, captures geographic distribution of portfolio investments, and it’s a way that we look at global imbalances and financial integration. It’s also used in our surveillance, our analysis. Policymakers look at the survey as well as academics. You should check it out when it’s published online. It will come out shortly after we conclude here.

Let me also note that the IMF Headquarters will be closed next Thursday and Friday. That’s November 22nd and 23rd. That’s the Thanksgiving holiday period here in the United States. We’re celebrating that holiday. IMF Media Relations has a duty officer system. For those of you unfamiliar with it you call 202-623-7100, you’ll find out who our duty officer is. So if you need anything, call the number or send an e-mail to during that period.

Lastly, before I turn to questions, the December issue of our magazine, Finance & Development, will be published on November 29th. The next EXR briefing will also be November 29th. The reason I’m teeing this up today is because this edition of F&D will include a contribution by former U.S. President Bill Clinton. He has submitted an essay on the power of cooperation to solve social issues. The cover theme of this edition is philanthropy and social entrepreneurship. It’ll also include a profile of Jeffrey Sachs of Columbia University. Media Relations will provide the press with advanced text on November 29th.

With that, let me open the floor to questions.

QUESTIONER: Bill, good morning, and good luck on the new position. My first question, of course, is on Greece. What is the status of the talks on the sustainability of the Greek debt between the IMF and the Europeans? There are reports, especially from Europe and the United States, that the talks are deadlocked. Can you tell us what’s going on?

MR. MURRAY: As you may know now, Managing Director Lagarde is cutting short her Asia mission to attend the Euro Group meeting that has been scheduled for November 20th. I think that’s the clearest example I can give you that talks are not deadlocked. We remain in ongoing contact with our troika partners over Greece and other important issues, so that’s continuing.

Unfortunately, she had to cut short her visit to Asia, but that was because she’s a regular participant in Eurogroup meetings. This meeting, as you probably recall, was only scheduled earlier this week at the Brussels meeting. So, that’s where it stands. We’re in ongoing, active consultations among our partners.

QUESTIONER: Bill, can you tell us what the red lines are for the IMF? And which one of the European proposals you accept and which ones you are turning down? As I understand it, the Europeans gave some proposals to the IMF for the sustainability of the Greek debt.

MR. MURRAY: Yes. We’ve been serving as a technical advisor to the Europeans for some time on debt sustainability, so we have had ongoing dialogue with our European partners. I can’t really get into those sorts of details. Good questions, but I really am not prepared to go there. Let me just underline what it is that we want to see.

As we’ve been clear this week in saying, we want a real fix, not a short-term fix.A quick fix isn’t going to work right now. Critical to us is Greece’s debt sustainability. That means that by 2020 we want to see Greece’s debt at 120 percent of its gross domestic product. That’s where it stands.

QUESTIONER: So as I understand, the main issue for the IMF is the sustainability, correct? What are you going to do if the debt, the Greek debt, is not sustainable? Are you staying? Are you leaving the program? What is the next step?

MR. MURRAY: We’ve just made clear that it’s in Greece’s interest, it’s in Europe’s interest, and the world’s interest that Greece has a sustainable debt position. That’s the message that we have right now for our audience.

QUESTIONER: I wanted to know: are you calling for the Europeans to do what it takes to reduce the Greek debt, maybe lower its interest rate? According to you, what do Europeans have to do to reduce the Greek debt?

MR. MURRAY: Okay, thanks for your question. I’m not going to be prescriptive at this stage. There are a host of options that are possible. I remind you that the IMF has done what it needs to do in the context of its framework. We’ve extended maturities on Greek debt. It’s now a four-year facility rather than a three-year facility. It’s lower interest rate. So that’s the IMF contribution and clearly there has to be other actions taken to make sure that we reach a sustainable debt position in Greece.

QUESTIONER: So any action must be taken by the Europeans?

MR. MURRAY: Presumably, that’s who has to take the action.

QUESTIONER: Elaborating on that point, you would not sign off on a program that you believe is not sustainable for Greece’s debt, is that correct?

MR. MURRAY: We are stressing the need for debt sustainability in Greece.

QUESTIONER: So in the end, I mean, you could walk away. What are the rules governing that?

MR. MURRAY: We remain fully engaged with Greece. I am really not aware of any thought to not remain engaged with Greece, so the question is intriguing but I don’t think there’s much to talk about in that context.

QUESTIONER: I’m sorry, but could you elaborate on what do you exactly mean by “debt sustainability,” and why this difference between 2020 and 2022 is so important?

MR. MURRAY: Well, once we complete the review of the Greek program you’ll see a full debt analysis from the Fund. That’s a standard practice in the context of our staff reports. Those have been published in the context of Greece, so I’m not going to get into the nuances and the mechanics of how we come up with our estimate, but our basic finding is that to fix Greece, to get Greece back on a path of growth and job creation-ultimately, it’s not all about fiscal policy, it’s about getting back to growth and job creation and to get there you have to lower its debt-to-GDP ratio in a significant way and you’ve got to assure that it’s around 120 percent of GDP by 2020.

QUESTIONER: To understand it, the IMF is not accepting any change on the goal. The goal still is 120 percent to 2020, correct?

MR. MURRAY: Our view is that for debt sustainability, Greece should get to 120 percent by 2020, yes.

QUESTIONER: Yes, I want to follow up on Greece. Greece has been bailed out since 2010, and the GDP during the third quarter of this year got worse. Do you think that the program really works in Greece? Do you see it as a kind of failure for IMF?

MR. MURRAY: I think everybody has the best interests of Greece in mind and we’re just continuing to work to do whatever we can to get Greece back to the path of sustainable growth and job creation. Beyond that it may be an historical question, but we’re doing, and I think everybody’s doing their best to try and get Greece back on track.

QUESTIONER: It doesn’t seem to be working, does it?

MR. MURRAY: It’s not easy, it’s a very complicated task that everyone faces right now.

Okay. Let me just turn to the media center. A journalist is asking the following questions, an Argentina question:

Last September, the IMF Executive Board met to consider reports on Argentina’s progress in implementing the remedial measures to address the quality of the official data. The deadline is December 17th. Does the IMF know if there are any improvements since September?

Thanks for that question. Very briefly, there’s a process right now that is underway. That process is centered around our 24-member Executive Board. As noted in the question, our Executive Board is currently scheduled to meet on December 17th to consider the issues surrounding the quality of Argentine economic data, principally inflation data. We will obviously make public any kind of Executive Board findings that may happen around that time, but until then, it is incumbent upon us to keep the process within the context and the confines of our Executive Board. We’re not going to really be elaborating on their deliberations until they actually take place. That’s where we stand on Argentina.

Let’s see, I’ve got a second question. Let me take this question from the Press Center:

Is the IMF concerned about the recent general strikes in Spain, Portugal, and Greece as a result of the austerity measures going on out there?

Obviously we’ve taken note of developments throughout Europe for some time now. The point we want to make is that it is not all about austerity. It is about getting back to growth and to job creation. Many sacrifices have to be made and are being made by people throughout Europe and we’re very well aware of that. But that’s why it’s important to act expeditiously not just on fiscal policies, but on structural reforms and other important mechanisms that are going to help position Europe, a number of the countries mentioned here, position Europe for stronger growth and job creation over time.

QUESTIONER: I have a question in Cyprus.The mission is there. Can you tell us what the obstacles are? And the other thing that I heard this morning is that the mission is not happy with the results of the talks and is planning to come back. Can you confirm this?

MR. MURRAY: I’m not aware of any atmospherics along those lines. I really can’t comment. Let me follow up with you separately on that. I’ll need to check that out. The mission is ongoing, we’ll see what happens. The authorities have requested financial assistance and part of the process is we go in, we look at things, and we make value judgments. We sit down and talk to the authorities. That’s where we’re at right now, so I don’t have any really further guidance on timing or anything further on Cyprus. But I’ll get back to you if there’s anything significant.

QUESTIONER: Could you speak a little bit more about the Egyptian program? I know they extended it a little longer.

MR. MURRAY: Right.

QUESTIONER: So I was wondering if you could comment on what particular issues they feel the need to discuss and what the status is.

MR. MURRAY: Well, you saw yesterday, I think you covered it extensively. The mission issued a statement, a brief statement, out of Cairo. The authorities and the mission agreed to extend the discussions further for a number of days. I can’t really be precise on when those discussions will conclude, but it’s a sign of progress. We just have to sit tight. In terms of getting into the nuances, there’s been a lot of speculation in the local press about what the focus of the discussions is. I’m not at liberty to get into that at the moment. But, again, when we do have something to say, particularly when we conclude program discussions with any country, we issue press statements, so I would stay tuned there.

QUESTIONER: I have a question on the fiscal cliff. Are you optimistic about the fact that an agreement could be found between President Obama and the Republicans of the Congress?

MR. MURRAY: I think a significant development is the fact that the discussions have now been initiated. That is heartening. But the bottom line is that action has to be taken. And that means everybody, both sides of the equation have to be ready to deal with the fiscal cliff, the debt ceiling. If it is not dealt with, we are talking about zero to negative growth in the United States and the spillover, the global spillover effects could be very significant. So this is a significant challenge, both politically and economically, and our message is deal with it expeditiously.

Let me turn back to Media Center. I have another Greek question here: IMF has various loan instruments for low-income countries to borrow on concessional terms that carry zero interest rates. How can those concessional loans be applied to Greece?

MR. MURRAY: This is a legitimate question. I can understand why it’s being asked. Just let me clarify this. Again, what have we done with Greece? Number one, we’ve extended maturities to four years. We’ve lowered the interest rate on those loans as a result of shifting to the extended Fund facility. That is what we can do in the context of our framework, our IMF framework for Greece.

Concessional loans are a different story. One of the principal tests that are applied to concessional loans is income levels. And Greece is inherently a wealthy country, particularly relative to the nations, the member countries that qualify for our concessional zero interest loans. So long answer is Greece would not qualify for concessional lending.

QUESTIONER: Could you speak a bit about the evaluation of Portugal? Are you done with that or are you still in the country to evaluate Portugal’s program?

MR. MURRAY: That’s an ongoing relationship. Let me just clarify that. I think what you’re asking is what are we doing in Portugal? Portugal is an actual program. We have a relationship, ongoing relationship with Portugal.

QUESTIONER: Right. So you’re there right now to evaluate, kind of review the program, is that correct?

MR. MURRAY: Yes, there is a sixth review underway and the troika is there. The sixth review of the program is underway and we expect to include that next week. Again, once that concludes we’ll have additional information, so next week. Thanks.

MR. MURRAY: I think we’re done. Again, thank you very much. This is embargoed until 10:30 Washington time, 3:30 p.m. GMT. If you have any follow-up questions, send an e-mail to We’ll be happy to follow up.

Thank you very much for your time. Thanks, everybody here in the room. Have a good day.


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