Transcript of a Press Briefing by David Hawley, Deputy Director, External Relations Department, International Monetary Fund
IMF News, December 15, 2011
Source details
- Canonical URL
- Transcript of a Press Briefing by David Hawley, Deputy Director, External Relations Department, International Monetary Fund
Other formats
Bibliographic details
- Published: December 15, 2011
Opening announcements and logistics
- Briefing under embargo until 10:30 Washington time and that's 1530 GMT.
- Managing Director Christine Lagarde announced a new Director of the External Relations Department, Gerry Rice, who will take up his new position as director by the end of the year.
- Managing Director engagements:
- Today at 10:00 a.m. Washington time she will give a speech at an event organized by the State Department and hosted by U.S. Secretary of State Hillary Clinton on women in public service.
- Next week she will be in Africa: on the 19th and 20th in Lagos and Abuja, Nigeria, and on the 21st and 22nd in Niamey, Niger.
- IMF closures: Fund closed for business on Monday, December 26, and on January 2, 2012. Next briefing scheduled for January 12, 2012.
Italy: staff visit and monitoring mission
- A small staff visit, headed by Asim Hussain and Antonio Spilimbergo, will travel to Rome next week to meet new authorities.
- Purpose of visit:
- Receive updates on recent budgetary developments.
- Discuss modalities for future monitoring missions.
- Clarifications:
- This is not a monitoring mission; it is a staff visit.
- There are no dates yet for future monitoring missions.
- Sequence: small mission next week to discuss modalities, then potential monitoring mission thereafter.
Additional resources, European proposal, and IMF financing capacity
- Europe and IMF resources discussed repeatedly:
- European leaders announced willingness to consider a financial contribution to the IMF and said they would take a further 10 days to finalize the proposal.
- Reports referenced a figure of 200 billion euros from European nations; the Fund noted discussions but no finalized modalities.
- Mention also of 50 billion euros additional resources for IMF coming from non-European nations (question referenced this figure).
- IMF stance and capacity:
- The General Resources Account (GRA) is the Fund's main financing source; this underlies the Fund's assumption about where contributions would be placed if used for general purposes.
- The Fund has adequate resources to meet present needs, but if there is an intensification of the crisis augmentation of the Fund's resources may be needed to fulfill its systemic role.
- Conversations and contacts between the Fund and its membership are ongoing about the scale and manner of any augmentation; no detailed decisions announced.
- Technical and governance points:
- Decisions on composition of financing and modalities are questions for contributing authorities and for membership discussions.
- Changes in quota shares occur in the context of quota reviews; a bilateral or other loan would not itself change quota shares.
- Use of administrative (administered) accounts versus the GRA differs by intended use: administrative accounts for specified purposes (e.g., some lending to low-income countries), GRA for the Fund's general purposes.
Questions about donor composition, contagion, and risk concentration
- On how European contributions would be provided (e.g., via central bank balance sheets): no specifics available until Europeans finalize their proposal.
- On contagion and risk concentration:
- Portfolio concentration is a consideration for the Fund; historically the Fund has had heavy concentration in particular segments of the membership (example: centrally planned economies transition about 20 years ago).
- The Fund is careful to ensure programs are properly financed, including by other parties; program design is an important safeguard and the Fund does not lend unless confident programs will succeed.
Country-specific items and program monitoring
- Greece:
- Disbursement decisions rest on staff, management, and the Executive Board being satisfied the member is undertaking agreed policies under the program.
- Poul Thomsen (Mission Chief for Greece) noted that boosting Greece's potential growth over the medium-term is important; “medium-term” not defined further.
- Portugal:
- The second review of Portugal's program is scheduled to be considered by the Executive Board on Monday; judgments about reviews and disbursements await that review.
- Spain:
- No negotiations with the Spanish authorities on any form of IMF financing.
- Priority reforms for the new Spanish government: labor market reforms to reduce high unemployment, ambitious medium-term fiscal targets, and continued reforms of the financial sector.
- The next update of the WEO will be released in late-January and will include the Fund's view on the outlook and country impacts.
- Hungary:
- The Fund is carefully examining recent legislative proposals affecting central bank independence; erosion of central bank independence would be of great concern.
- Egypt:
- Authorities have not requested an IMF arrangement. The Fund has maintained a close dialogue, provided support, and has been in Cairo on a number of occasions to assess developments and financing needs.
- No fresh specifics to report.
- South Sudan:
- Discussions on South Sudan becoming a full member of the IMF are well advanced.
- South Sudan's main challenges: maintaining economic stability, investing oil resources for social and infrastructure development, and building institutions to support sustained economic development.
- The Fund is stepping up technical policy advice and has a resident adviser in the country.
Implementation and next steps for euro-area summit decisions
- IMF emphasis: the important next step is to implement the summit decisions—enhanced financial discipline, strengthened economic coordination, acceleration of the entry into force of the ESM, and willingness of EU member states to provide additional resources.
- The Fund will monitor implementation; broader or additional steps beyond implementation of summit decisions were not specified by the Fund during the briefing.
Media access and Managing Director engagement
- Managing Director has participated in numerous interviews (examples cited include the F.T. and the BBC) and will speak at events during upcoming travel.
- Journalists requested more frequent or earlier access; the Fund noted the Managing Director has been engaging the press and will consider requests.
Transcript of a Press Briefing by David Hawley, Deputy Director, External Relations Department, International Monetary Fund