Transcript of IMF Press Briefing

May 11, 2017

MR. MURRAY: Good day. I’m William Murray from the Communications Department from the International Monetary Fund and this is one of our regular press briefings. As usual, it’s embargoed until 10:30 a.m. Washington time. That’s roughly an hour from now, for our viewers by the media briefing center.

Let me go through events and travel and then I’ll get to questions from the press here in the room and from those of you that are currently watching this briefing online.

On Friday, May 12, and Saturday, May 13 Managing Director Christine Lagarde and First Deputy Managing Director David Lipton will be in Bari, Italy for the G7 Finance Ministers and Central Bank Governors meeting. The three main themes of that meeting are inclusive growth, security as a global public good and international taxation. On May 14th and 15th, the managing director will be in Beijing for the Belt and Road Forum, hosted by Chinese President Xi. We expect that she will have remarks at the plenary session in the morning of Sunday, May 14th, and at a thematic session on financial connectivity on Sunday afternoon, May 14th. The managing director is also scheduled to take part in a leader’s roundtable at the Belt and Road Forum. That’s, as I understand, scheduled for Monday, May 15th. While Madame Lagarde is in Beijing, she will also meet with the Chinese leadership and other senior officials.

On May 20th, the managing director will deliver the commencement speech at Washington College in Chestertown, Maryland. Media Relations will be able to send you the commencement speech under embargo.

Deputy Managing Director Tao Zhang will be in Tanzania from May 13th through the 18th and in Malawi May 18th through 21st. While he’s there, he’ll have meetings with senior officials, civil society organizations, members of the business community and our development partners. The Deputy Managing Director will deliver a speech as well, at the Central Bank of Tanzania on Wednesday, May 17th. That event will be open to the press and Media Relations will be able to brief you on fuller details if you’re interested in that event.

As you know, we’ve been rolling out various regional economic outlooks. This morning, we released the regional outlook for Central Eastern and Southeastern Europe, after we’ve had the African regional outlook, the Asia-Pacific. The Western Hemisphere Department’s regional outlook, it’s the outlook for Latin America and the Caribbean, will be launched in Sao Paulo, Brazil on Friday May 19th at 9:30 a.m. local time. Western Hemisphere Director Alejandro Werner will present the report. The event will be webcasted live on and certainly media relations will be in touch with you with more details regarding the venue in Sao Paulo and the launch. With that, let me open this floor to questions and those of you online.

QUESTIONER: Thank you. Is there any progress in the discussions on the Greek debt and I’m referring to the kind of progress that you would like to see, and also what are the expectations from the G7 summit where the Greek issue will be discussed as the U.S. Treasury official confirmed? Thank you.

MR. MURRAY: Thanks. Step back again, remember last week we announced that we have basically come to preliminary agreements on the economic policies that are essential for Greece and that the next phase is the second leg of the stool that we’ve been talking about, the second leg being restoring debt sustainability for Greece. I don’t have any really fresh information. Nothing has changed per se since the agreement on policies that were achieved last week. And, as you know, last week we welcomed the progress on the policy package that’s centered around reforms allowing fiscal policy to become more growth friendly. However, Paul Thomsen, the Director of our European department, did note last week that this will have to go hand in hand with a credible strategy to restore debt sustainability. And the discussion in this regard is only just getting underway.

You asked about the G7. You mentioned the summit, and my understanding is that at the Bari Ministerial, Greece is not on the official agenda, but I assume that there will be some discussions while officials are in Bari. But I don’t have any further details on that.

QUESTIONER: There are many reports that there has been an agreement on the primary surplus. Can you confirm or is this just speculation?

MR. MURRAY: I really don’t want to get into that today. I mean we’re still in discussions on that. And of course, the debt discussions affect the primary surplus over the horizon, so until these things fall into place, I can’t really comment.

QUESTIONER: As you may know, the Slovakian Finance Minister said that the IMF had actually reached a deal on joining the EU program. Are you saying that what he said was inaccurate?

MR. MURRAY: All I’m saying is that our position hasn’t changed since what we discussed last week and discussions are still continuing.

QUESTIONER: So the IMF has not reached a deal on that specifically?

MR. MURRAY: Like I said, discussions with various parties on debt sustainability are continuing.

QUESTIONER: So no deal?

MR. MURRAY: Yeah. They are continuing. For the obvious, when there is an agreement, you’ll know. I mean, that’s the way it’s going to work. But right now, our position has not changed since the agreement on policy was achieved last week. I mean that’s really the message right now. Okay, one last on Greece and then we can --

QUESTIONER: We have two or three more.

MR. MURRAY: Oh, cool. Okay. It’s a Greece briefing today.

QUESTIONER: Is Ms. Lagarde going to meet with the Prime Minister of Greece in China? They announced it in Athens.

MR. MURRAY: Yes. I can confirm, I can confirm that as well.

QUESTIONER: I have another question. If there is no agreement on the debt relief, can the second review be completed? I mean, is the agreement going to be complete without an agreement on debt relief? And if the second review cannot be completed because of the disagreements from the debt, what will happen with the next installment?

MR. MURRAY: Well, as you recall, Paul Thomsen has been very public at the Spring Meetings here in Washington. He had a number of remarks about the status of discussions with Greece and its partners. Last week, he briefed. He’s been very clear on what is needed to conclude the whole package. And that has not changed. That position remains, and as we said, a credible strategy to restore debt sustainability is still the key feature and that’s what we’re discussing right now, a credible strategy.

QUESTIONER: I have another question on Greece actually. Can you clarify for me the status of the debt discussions because you’re saying … have those discussions started already and do you have any timeline for their completion?

MR. MURRAY: I don’t have any further guidance on that. I mean -- we don’t like to talk about the tick-tock of negotiations. I’m not prepared today to get into the details. But we said last week, we said even before last week, before the preliminary agreement was reached on the economic policies that there was a process and the process included number one, coming to agreements with the various players, prominently Greece, on economic policies, and then after that, work on the debt, on debt sustainability. And that’s the package, that’s the package necessary for us to come to our executive board with a firm proposal. So nothing’s changed.

QUESTIONER: Can you just confirm one specific point? Have the discussions started yet?

MR. MURRAY: You know, I am sure they have in various fashions, but I don’t have -- I can’t give you clear guidance on location and all that.

QUESTIONER: Have they started, yes or no?

MR. MURRAY: I, uh, they’ve started in a fashion. But I can’t be more precise than that. We’ve been talking about debt sustainability for a number of years now. So it’s been ongoing. It’s an ongoing discussion. Now, it’s reached a different level, where we have to try to come to a conclusion. That’s the bottom line. Okay. I don’t have any more on Greece, to be honest.

QUESTIONER: Can you confirm that the IMF needs the commitment of the opposition party of Greece for this new agreement, for the New Democracy Party?

MR. MURRAY: You’re asking me to give a detail. I don’t know. I understand the question, Michael. It’s just that I don’t have that level of detail at this point. I don’t know the answer; we’d have to get back to you on that. But we’re not, at this point in time, getting into the details of what conditions are in countries we support for policies. But as far as it being a precondition, I can’t answer that right now. I’d have to get back to you on that. Can we make this the last Greece question, because I do have one here on Sri Lanka here on my screen. Go for it.

QUESTIONER: It’s actually a question on France. During the Spring Meetings, Madame Lagarde said that a Le Pen presidency would pose a threat of dislocation of the Euro area. Now that Macron won the election, are you relieved, and do you see that as a good sign for further economic integration of the Euro area?

MR. MURRAY: Well, certainly the Managing Director has congratulated Mr. Macron and we look forward to continuing our strong and effective collaboration with France. President Macron has run on a strongly pro-European platform and advocated deeper integration of the Euro area. These issues will have to be discussed and decided among member states. We certainly support the president’s emphasis on strengthening the European project.

QUESTIONER: Following up on the specific points, what are, according to the IMF, the most pressing reforms that the future Macron government would have to carry out?

MR. MURRAY: Well, maybe let’s preface this by noting that we are in heavy article four country review season. So mission teams are in the field, they are going into the field across the globe to do their annual reviews of economies. But we’ve been pretty clear on France for some time, and with regards to your question, we’ve said before that major efforts are needed to reduce stubbornly high unemployment and put public finances on a sustainable footing. To do that in France, we’ve cited basically three points. One, reversing the trend of rising public debt by limiting the growth of government spending via various reforms. This also could eventually make room for alleviating France’s heavy tax burden.

Second point is strengthening job search incentives under the unemployment and welfare benefits system, and adapting also education and training to the French labor market. Last and third point that we have made in regards to French economic reforms is easing business regulations and opening up access to regulated professions to support a job rich recovery. We’ll have more to say on France later this year. These findings were suggestions in our 2016 Article Four review of the French economy. We’ll be revisiting these in the near future.

QUESTIONER: Briefly, given the platform Macron ran on, are you optimistic that he could put in place some of the policies that you’ve been advocating for a long time in France?

MR. MURRAY: Good question. Let’s get through the 2017 Article Four consultation and revisit that question. We’ll have to see, you know, they’re still forming their government. We have to be hopeful that reforms are possible in any country and we’ll see how these go. But these are our three key points. Okay. I’ve got a question from Inner City Press on Sri Lanka. Do recent government moves on the Inland Revenue Act make it more likely the IMF Board will act on the request for completion of the second loan review in June and make a third disbursement? Again, it’s a question about Sri Lanka and the Inland Revenue Act and the likelihood of completing the second review.

We had a staff level agreement in Sri Lanka on May 3rd, last week. We noted in announcing that agreement that it’s subject to completion of a prior action by the authorities, which is submission of the Inland Revenue Act to Parliament. And that was a prior action that was agreed earlier this year. Our legal experts are still analyzing the content of the new draft bill, and are in discussions with the Sri Lankan authorities. That’s where we stand at the moment on Sri Lanka.

If we don’t have any questions, let’s go back to the floor for this clarification.

QUESTIONER: If there is no agreement on everything, including the debt, Greece is not going to receive the money, correct?

MR. MURRAY: Well, right now, we’re in discussions about the second bid. We just are in discussions right now over debt sustainability and, we have a preliminary agreement on economic policy. We’ve said that there needs to be a credible strategy for debt sustainability for us to move forward. So that’s where we stand right now.

QUESTIONER: But if you do not get there and there is no agreement, so what’s happening? There is no money?

MR. MURRAY: Well, as we said, we can’t go to our Board unless we have something that’s got a credible debt sustainability built in it. Okay. I think that’s it. I appreciate your time and we’ll have another briefing in two weeks. Again, this one is embargoed until 10:30 a.m. Washington time. That’s roughly in 40 minutes. Thank you very much and I look forward to seeing you again.

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