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

December 17, 2010

International Monetary Fund
Washington, D.C.
Thursday, December 16, 2010
Webcast of the press conference Webcast

MS. ATKINSON: Good morning. Welcome to the regular press briefing at the International Monetary Fund. I’m Caroline Atkinson, the director of the External Relations Department. And as usual, the briefing is embargoed until 10:30 a.m. Washington time, which is 1530 GMT. And I’ll begin by just letting you know of a couple of upcoming events and the timing of the holiday season.

The Managing Director will be speaking later today with Reuters Insider with Chrystia Freeland at noon on a program that will be webcast live on Reuters’ website. He also is doing an interview with Charlie Rose and that will be aired on PBS and then on Bloomberg TV tonight or tomorrow. So those are two general interviews of the Managing Director.

The IMF will be closed for business, in observation of the public holidays in the U.S. on December 24 and December 31. Media relations staff will be available should there be something urgent on those days. And the next press briefing like this will take place on Thursday, January 6, at the normal time.

If you could let me know, I have some questions online, but I’ll start in the room. And please identify yourselves and your news organizations.

QUESTIONER: Caroline, yesterday it was announced that at the 22nd, the Board have to work on the Ukrainian question. I perfectly understand we can’t speak about the possible results, but could you give a little bit background? I know it was a mission in Ukraine. They got results of the negotiation with the Ukrainian authorities. So could you comment a little bit about the background before the decision of the board? Thank you.

MS. ATKINSON: Yes. The mission was in the field in Ukraine in November, and they reached agreement at a staff level with the authorities. That agreement will be taken to our Executive Board next week, December 22, where the Board will consider the disbursement of the 1 billion SDRs that would be released to Ukraine from the Fund if that review is completed. And about a good chunk of that will be for budget support. About a billion dollars would be going for budget support. And as you know, the money is usually made available very quickly after the board decides. And we will announce the decision after Board. Thank you.

I have a question online from Argentina: What do you think about the technical mission? There’s been an IMF technical mission in Argentina to discuss a new consumer price index. Was it useful and what’s next? And what was the opinion of the private economist that they met? And do I think that we were able to erase distrust of the public numbers?

Well, we had a very useful mission in the field. It was the first of what we envisage as several. There may be a couple more missions to Argentina on this topic between now and the spring. And the authorities have asked, in a welcome step, have asked for our support in developing a new national consumer price index that they would like to be a strong and credible consumer price index going forward.

QUESTIONER: I would like just to ask you when the next Board of IMF on Greece will be held.

MS. ATKINSON: Yes. The review of the Greek program will be discussed in our Executive Board tomorrow, Friday, and there will be probably a press release available on Friday. It depends a little bit on the timing of the board meeting. And then we will be releasing the staff papers, the detailed papers, probably early next week. We’ll do it as soon as possible. There are, you know, some bureaucratic things that need to get sorted out, but basically the decision will be taken tomorrow.

QUESTIONER: Can we have any conclusions or any elements, details about this potential report regarding the Greek economy?

MS. ATKINSON: When the report comes out you can. And after tomorrow, we will be putting out some news on it and we will draw your attention to that once the Executive Board has had the discussion.

I have another question online from Portugal: It says some European authorities have underlined the need for more funds in the European financial stability facility. What is the position of the IMF? Is this necessary? And is the IMF prepared to increase its participation if the EFSF does the same?

Well, perhaps I can start by clarifying that the IMF deals one-by-one, as we’ve just been discussing in the case of Ukraine and Greece, one-by-one with each of our member countries on a bilateral basis. So we do not put aside funds for a pool. We have lent alongside the EU and in coordination with the EU and some national governments and with the ECB in a couple of cases in the euro zone -- in Greece and Ireland -- but we do not put money aside for a pool. And more generally, we believe that we have a liquidity position that is sufficient to meet any needs.

On the broader question of what is going on in Europe, I don’t want to get into the specifics of something that’s being debated in Europe now. We do believe that there’s a need for a comprehensive and integrated plan that’s a Pan-European plan for reviving the euro zone and, most importantly, bringing back growth. And we also do believe that the Europeans themselves are committed to that and that it’s a manageable situation. And we expect that they engaged in working on a comprehensive plan.

QUESTIONER: Sticking with the euro zone, do you have any comment on Ireland?

MS. ATKINSON: Well, Ireland is going to be discussed in our board today and we will be announcing after that the results. So I am not going to get ahead of the Board in that. You know a lot of details were announced earlier. We will be coming out with more details once the board has met, which it will be doing later today. Thank you.

QUESTIONER: And my last question is if you have any comments regarding the yesterday violent demonstrations in Greece, saying IMF go home.

MS. ATKINSON: It’s very troubling whenever there’s violence. When -- to demonstrate and to protest is normal, this program, or it’s understandable at any rate. The the situation that Greece is very difficult.

We’ve stressed the importance of two elements. One, that the adjustment and the cost of adjustment should be borne fairly. There should be a fair distribution of the burden and, in particular, that people should pay the taxes, including the rich should pay the taxes that are due. And the second is that a really important part of the program is to open up to competition some areas that had been closed, which is good for the people that were protected, but not good for the economy as a whole. And the point of opening up this is to really provide the means for Greece to grow and grow more strongly over the medium term.

I have another question here on Portugal: An IMF delegation has been in Lisbon recently or is in Lisbon right now. Is this only related to the Article IV consultation or does it have something to do with an eventual intervention of the Fund in Portugal?

So the mission, there is a small technical team in Lisbon at the moment. I believe they’re coming back soon. And this has been related to the Article IV consultation and discussions about structural reforms and so on.

I have another question online: The Managing Director, Dominique Strauss-Kahn, said that the European Union needs a comprehensive plan to resolve the current crisis. What exactly does that entail?

I think a comprehensive plan entails measures to support the countries in the euro zone, to support financial stability. And indeed, you may have seen that today the European Central Bank announced that it will be increasing its capital to help promote financial stability. That’s another important measure. We have seen back in May that the Europeans, the euro zone, agreed on the EFSF, and that has since been established, which takes a more comprehensive approach. So all of these steps are important parts of coming together.

There have been discussions about the European stability mechanism, which will be worked on in the coming weeks. These are all important elements of a comprehensive plan, which European institutions, I believe, are working on.

Thank you very much and happy holidays.


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