## Transcript of a press briefing by Gerry Rice, Director, External Relations Department, International Monetary Fund

_IMF News, March 28, 2013_

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## Bibliographic details
- Published: March 28, 2013

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### Announcements and upcoming IMF events
- Press briefing embargoed until 10:30 a.m. Washington time.
- Managing Director Christine Lagarde travel and speaking engagements:
  - Travel to Hainan, China to attend the Boao Forum for Asia’s 2013 Annual Conference on April 6-8.
  - Deliver Spring Meetings’ curtain raiser speech on April 10 at 12:15 p.m. (Economic Club of New York, New York City).
- Lecture hosted by the IMF in partnership with the World Resources Institute:
  - Lord Nicholas Stern on fostering growth and poverty reduction in a world of immense risk on April 2 from 2:30 p.m.-4:00 p.m.; Managing Director to give opening remarks.
- World Economic Outlook (WEO) analytical chapters:
  - Published on April 9; press conference at 9:30 a.m., April 9.
- Global Financial Stability Report (GFSR) analytical chapters:
  - Press conference at 9:30 a.m., April 11.
- Analytical chapters posted under embargo by end of day April 5 on the Press Center.
- Spring Meetings:
  - Begin the week of April 15; agenda and publication dates online now.
  - Conference “Rethinking Macro Policy II, First Steps and Early Lessons” hosted by Olivier Blanchard and others on April 16-17; webcast live.

### Cyprus: overview, implementation, and IMF role
- Context and diagnosis:
  - Cyprus faced an exceptional situation with an oversized banking sector, two major banks deeply insolvent, and high and rising public debt.
- Agreement reached in Brussels:
  - Focuses on dealing with the two problem banks.
  - Fully protects insured deposits in all banks through a clear strategy.
  - Seeks debt sustainability while avoiding excessive burden on the Cypriot taxpayer.
  - Described as having the full support of the Cypriot authorities, the entire Eurogroup, and the three institutions (IMF, European Commission, European Central Bank).
- Adjustment and outlook:
  - Financial sector downsizing and economic adjustment expected to be difficult for the Cypriot people over some period of time.
  - Objective: a more sustainable, growth-promoting economic model.
- IMF technical work and financing decision process:
  - IMF, European Commission, and European Central Bank staff teams in Cyprus completing technical details; mission expected to conclude in early April.
  - IMF Executive Board will discuss possible financing arrangements for Cyprus after mission; a final decision from the IMF not expected before the end of April.
- Unresolved specifics:
  - No IMF-provided figure yet for IMF financial assistance — to be determined by the ongoing mission.
  - No specific numbers provided on cash outflows while banks were closed; teams on the ground to assess recapitalization needs.
- Applicability to other euro area cases:
  - Repeated position: Cyprus case is very complex and unique; it would be difficult to extend that model to the rest of Europe or the world.
  - Emphasized the broader need for Europe to move toward a banking union including a single supervisory mechanism, a single resolution mechanism, and a single resolution authority.
- IMF stance on earlier proposals (bank levy/initial agreement):
  - Focus remains on the agreement reached in Brussels; no further comment on the initial levy beyond reiterating support for the current agreement.

### Greece and Ukraine program negotiations
- Greece:
  - IMF, European Commission, and European Central Bank teams were in Athens in mid-March for the third review; significant progress made, a few issues outstanding.
  - Teams plan to resume discussions in Athens during the first week of April; no further details provided while mission is ongoing.
  - Return timing: teams plan to return during the first week of April; length of mission as normal for such reviews.
- Ukraine:
  - Mission in Kiev as of the previous day to continue negotiations on a new Stand-by arrangement.
  - Expectation of progress over the next couple of weeks; no detailed outcomes provided.

### Slovenia and other country-specific banking concerns
- Slovenia:
  - Distinct from Cyprus; loan problems in the construction sector and leveraged buyouts weighing on banks’ earnings and capitalization.
  - Authorities plan a publicly owned asset management company to take over nonperforming assets and recapitalize banks to enable funding of the real economy.
  - IMF: Article IV Consultation concluded in October 2012 with a published concluding statement.

### Egypt: engagement and missions
- Masood Ahmed visited Cairo on March 17 and reiterated IMF commitment to support Egypt.
- Agreement to continue discussions aimed at reaching agreement on possible financial support.
- Next IMF staff team expected to travel to Egypt in the first days of April to continue work; based on the most up-to-date information submitted by the authorities.

### Italy: economic recommendations and political stability
- IMF monitoring:
  - Following political developments but not commenting on domestic politics.
  - Reiterated recommendations from last year’s Article IV Consultation:
    - Maintain gains from fiscal adjustment and structural reforms.
    - Shift composition of fiscal adjustment toward lower expenditures via thorough spending reviews and lower taxes to support growth.
    - Accelerate implementation of comprehensive labor and product market reforms to boost productivity and labor participation, especially for young people and women.
- FSAP:
  - Financial Sector Assessment Program concluded the prior Tuesday; statement issued.
- Political stability:
  - General affirmation that stable government is important for financial stability.

### BRICS development bank initiative and IMF governance reform
- BRICS development bank:
  - IMF follows the initiative with great interest; recognizes infrastructure gap in developing countries as key constraint to sustainable growth.
- IMF quota and governance reform:
  - Good progress made on the 2010 governance reform; described as “very close to the finishing line.”
  - Urged all member countries to implement reforms as speedily as possible.
  - United States has indicated support for moving forward with the reform as expeditiously as possible.

### IMF governance and Managing Director briefing
- On legal matters concerning the Managing Director:
  - IMF stated it would not comment on cases before the French judiciary.
  - The Executive Board has been briefed on the matter, including recently, and continues to express confidence in the Managing Director’s ability to carry out her duties.

### Euro area market confidence and policy guidance
- Markets and reassurance:
  - Emphasized the importance of euro area leadership continuing implementation across fiscal, monetary, and structural reforms.
  - Key message: accelerate implementation of measures already initiated to support confidence and stability.

### Institutional posture and staff sentiment
- IMF’s institutional role and mood:
  - IMF serves 188 member countries.
  - Staff share a sense of urgency and commitment to assist members across regions.
  - Work characterized by long hours and dedication to serve members’ needs.

*Transcript of a press briefing by Gerry Rice, Director, External Relations Department, International Monetary Fund — March 28, 2013.*

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## References

- [Cyprus and the IMF](http://www.imf.org/external/country/CYP/index.htm)
- [Arab Republic of Egypt and the IMF](http://www.imf.org/external/country/EGY/index.htm)
- [Greece and the IMF](http://www.imf.org/external/country/GRC/index.htm)
- [Italy and the IMF](http://www.imf.org/external/country/ITA/index.htm)
- [Russian Federation and the IMF](http://www.imf.org/external/country/RUS/index.htm)
- [Republic of Slovenia and the IMF](http://www.imf.org/external/country/SVN/index.htm)
- [People's Republic of China and the IMF](http://www.imf.org/external/country/CHN/index.htm)
- [Portugal and the IMF](http://www.imf.org/external/country/PRT/index.htm)
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_Source: https://www.imf.org/en/news/articles/2015/09/28/04/54/tr032813_