Transcript

Washington, D.C.
Thursday, August 28, 2014

MR. RICE: Good morning, everyone, and welcome to this briefing on behalf of the International Monetary. I’m Gerry Rice and this is one of our regular biweekly press briefings. We're embargoed until 10:30 a.m. Washington Time. That's 3:30 p.m. GMT.

Let me begin, as usual, with a few announcements, and then I will come to your questions in the room, as well as to our colleagues online.

Management engagements and travel: The Managing Director, Christine Lagarde, will be in Japan on September 12. She will be the keynote speaker at the World Assembly for Women in Tokyo, which is an international conference co-hosted by the Japanese government.

Our Deputy Managing Director Min Zhu will attend the UN conference on small island developing nations in Samoa on September 1 to 4, and will host an IMF event to discuss how to build macro-fiscal resilience in small island developing states. Min will also have a press briefing there. He will then travel to Hong Kong, to give a keynote speech on September 5 and an event hosted by the Hong Kong Association of Banks. And, finally, he will go onto the so-called Summer Davos in Tianjin, China on September 10 to 12.

Our other Deputy Managing Director Naoyuki Shinohara will travel to Italy on September 11 and 12 to attend the Asia-Europe meeting of finance ministers in Milan, where he will speak at the opening session.

Let me also remind you that you can register for the 2014 IMF and World Bank annual meetings, to take place October 10 to 12 -- not so far away now, and you can access the registration site on the IMF’s webpage.

And with that, let me turn to the room, and take your questions, if you have any.

QUESTIONER: I’m starting with the question I’m sure everyone has. The Managing Director returned from Paris yesterday afternoon, and I was wonder if she’s already briefed the Board about the latest in the Tapie investigation in France, and whether the Board had any statement to make after that.

MR. RICE: Yes, I know there is, as you say, there’s great interest in this question. So, let me just step back and set out a couple of facts on the process, and respond to your questions, too.

As you know, this has been a process over more than three years at this point. The Board has been briefed on a number of occasions, including earlier this year, and statements have been issued at the end of each of those briefings of the Board. Again, just laying out some of the facts.

There was a statement from the Managing Director herself yesterday, and a commentary briefly from myself, as the Fund spokesman.

In terms of the next steps, yes, the Managing Director has returned to work here at the Fund. And we do anticipate that there will be another briefing of the Board, as she herself had indicated. We expect that to be very soon. I do not have the precise date for you, but soon.

And, yes, I would expect the Board to authorize a statement at the end of that meeting, as has been the case in the past.

QUESTIONER: In past briefings of Board, have much in detail have they discussed potential next steps, such as transition from being a witness to a full investigation? Did they discuss scenarios with the case?

MR. RICE: You know, I’m not going to go into the details. It’s not appropriate for me to go into the details of those Board discussions, those Board briefings, which are confidential.

But as you can imagine, you know, they’re very careful. They’re very comprehensive briefings.

QUESTIONER: Tomorrow, there will be a Board meeting on Ukraine. So, what are your expectations for the meeting? Do you expect any unforeseen developments?

MR. RICE: The Board is scheduled to meet tomorrow, to discuss the first review of the Ukraine program. As usual, we will have a press release on the outcome during the day tomorrow. So, you can anticipate that.

What to expect? If the review is approved by the Board, the disbursement would take place a few days after that. I don’t want to preempt the Board discussion, but I do think the statement, the end-of-mission statement, that was issued about a month ago, was quite comprehensive and useful in terms of giving an assessment at that time of where the program stood.

In summary, if it’s helpful, at that time, the staff found that policies had generally been implemented as planned. I’m just looking at the statement here -- and had reached understandings with the Ukrainian authorities on the policies necessary for the completion of the review -- while I can tell you more that the authorities had committed to take a number of policy actions prior to the completion of the review, which have since been implemented.

QUESTIONER: So, overall, I understand the situation is deteriorating on the ground, not in terms of your program, but in terms of the political and economic situation in the country as a whole.

How can it reflect on the program?

MR. RICE: I think, as we’ve discussed here before on Ukraine, the Fund assessment, the staff report, is very candid on the downside risks and the uncertainties related to this program, of which, you know, everyone is aware.

That said, I just mentioned the most recent assessment made by staff at the time of the last mission, and the Board tomorrow will be having a thorough discussion of all these issues again, including the issues you’ve referred to.

Just a word, perhaps -- I mentioned that the authorities have implemented the required prior actions, as we call them, at the Fund. In addition, I can tell you that senior representatives of political parties have publicly expressed in the past few days their support for the key program objectives and policies, which is a positive development. I say that because you had asked about the political dimension.

QUESTIONER: I will get you back to the investigation. And as you said, this has been going on for more than three years, and the Board members being notified so many times. They have issued some statements.

How are they feeling right now? This issue is, right now, in the press. How do you evaluate their feeling? Have you sensed any displeasure about this breakout?

MR. RICE: Well, again, you know, I can’t -- it’s not appropriate for me to give you a sense of the Board’s feelings about this, because that’s something they will discuss, when we have the briefing.

What I can tell you is that, as I mentioned, the Board has been briefed on this matter on a regular basis, on a number of occasions, including this year. And on each of those occasions, they have expressed confidence in the ability of the Managing Director to effectively carry out her duties.

QUESTIONER: Any embarrassment you feel that it has come out in the media and become an issue in which people are reporting for investigation on simple negligence and complacence?

MR. RICE: You know, we’re moving ahead with our work. The Fund is very focused on a number of issues, some of which I hope we can discuss here today -- one of which we’ve just mentioned. And we are completely focused on serving our membership as best that we can, and that’s our focus right now.

QUESTIONER: I would like to stay on the same topic. Is there anything in the IMF statutes that would prevent Managing Director placed under formal investigation to stay at her position?

MR. RICE: I didn’t catch your first word, Anything in the --

QUESTIONER: In the IMF statutes, in the IMF internal rules.

MR. RICE: . You know, what I would say is, the IMF has, of course, a very strong governance framework. The Executive Board plays a central role in that framework. The Managing Director serves at the pleasure of the Executive Board and according to the terms of her appointment, all of which are published -- all of which you can look at on the web.

And under the articles of agreement, the statutes that you mentioned, the Board is responsible for conducting the day-to-day business of the organization, including, you know, the selection of the Managing Director.

The Managing Director also is subject to the staff code of conduct, which I can tell you is also published, and you can find it, read it on the IMF website.

Let me leave that there. You may have a follow up.

QUESTIONER: I just want an answer to my question. I mean, can you be, like, placed under formal investigation and stay as a Managing Director? There’s nothing in the studies that would prevent -- I mean, that would ban -- that would prevent somebody who is placed under formal investigation to stay as a Managing Director?

MR. RICE: Well, I just think we should be careful here. There are no charges that have been made against the Managing Director. There’s an allegation, and I would refer you to the Managing Director’s statement yesterday, which I mentioned -- which said she believes the allegation is without merit. An appeal has been lodged, and she has no intention to resign.

QUESTIONER: Without telling us if it will happen or not, is it technically possible that during the briefing of the Board members -- more about Ukraine -- the meeting of the Board members -- do members of the Board can be briefed about the investigation? Is it technically possible to cover two different topics during the same Board meeting?

MR. RICE: You know, the Board can discuss whatever it might wish to discuss. My view would be that that is highly unlikely to happen.

QUESTIONER: it’s highly unlikely it happens before next week -- the meeting of the Board about the Christine Lagarde investigation? For you, it will be next week (inaudible)?

MR. RICE: I don’t have a date for you, as I mentioned earlier. But it’s clearly going to be very soon -- as soon as possible. The Managing Director returned today to work, so, you know, it takes a little bit of time, as I’m sure you understand, to set up a Board meeting. And that’s what’s happening, and it will happen as soon as possible.

Look, I know this is of great interest to you, and we will keep you posted as to what is happening so, you know, you get the information, and you’re able to respond in a professional way. I understand where you’re coming from.

QUESTIONER: Several Greek ministers will be traveling to Paris to meet with representatives of the Troika next week. Who will participate from the IMF side? What is the nature of these talks? Are they part of the review? And why in Paris?

Thank you.

MR. RICE: Yeah. You’re quite right about this meeting. Well, let me just give you what I know.

A select staff team, IMF team, along with our colleagues from the European Commission and the European Central Bank, will indeed meet with the Greek authorities in Paris September 2 until September 4, to discuss the way forward on the forthcoming review, which will be the sixth review of the program.

That meeting, the Paris meeting, is expected to be followed by the full mission to Athens in last September to discuss the sixth review. So, I hope that’s clear.

The small staff team will be led by Rishi Goyal, and meeting in Paris -- that’s at the authorities’ request, actually. So, you can perhaps ask them about that.

SPEAKER: So, won’t Mr. Thomsen be at the meeting in Paris?

MR. RICE: No. As you may know, Poul Thomsen is currently Acting Director of the European Department, so he will not attend that meeting, given Poul’s numerous new commitments as the Acting Director of the department.

What else can I tell you on that? Of course, Poul will remain closely involved in the IMF’s work on Greece, in a supervisory capacity, but Rishi Goyal, who I mentioned, will lead the IMF’s day-to-day work on Greece in the meantime. I hope that’s clear.

So, again, the negotiating missionfor the sixth review is planned for late September. So, the discussions in Paris are a preface to that, okay?

QUESTIONER: Two questions, one on the MD. Could you let us know -- well, I think excluding her predecessor’s case, which was very - of a particular nature -- but has the IMF ever experienced or had any similar case, where one of its MDs were under investigation in their home country -- or in another country, as a matter of fact?

And my second question is regarding Ukraine. Is there any sense or is there any analysis showing that Ukraine will need more money than what has been awarded in the package? The ambassador talked to us last week about a donors’ conference or a contributors’ conference. Could you give us details? And will the IMF be involved or present at that conference?

MR. RICE: On your first question, I am not aware of any other cases.

On Ukraine, you know, we have said -- you probably know -- that, given the risks to the program, given the situation, that, you know, if the situation were to be exacerbated, the program would need to be significantly recalibrated, including potentially the financing, as you say.

The degree of uncertainty continues to be very large, and so it’s difficult to speculate on the specifics of what that recalibration might mean. This, for sure, will be one of the issues discussed by the Board tomorrow in the discussion to which we referred earlier.

The donors’ conference, Sandrine, we’ve talked about it before here. Certainly, the Fund expects to be there in some capacity -- probably as an observer. We certainly believe that international support for Ukraine is key to help Ukraine embark on the path of sustainable economic growth, while protecting the most vulnerable.

But, as you know -- and, I think, as we’ve said here before -- the Fund’s program and associated financial assistance represent an independent and leading source of support for Ukraine.

At the moment, I just don’t have for you administrative details of the conference. As I said, we discussed it here earlier, and I basically just have the same information as I had then, which was that it’s to be held in the fall. And I don’t have more details on that.

Let me go online, and then I’ll come back in the room for any further questions. You know, there’s a lot of interest, obviously, in the Ebola issue. And we have a question here asking, have we -- the IMF -- produced any estimates of the economic impact, and will there be any IMF response?

And this is an important issue. The Ebola outbreak is having an acute macroeconomic and social impact on three already fragile countries in West Africa. That’s Guinea, Liberia, and Sierra Leone.

Our staff is actively working with the governments of those three countries to prepare an economic assessment of the impact, of the outbreak. What is already clear at this stage is that growth is likely to slow sharply in all three cases, and significant financing needs are likely to rise.

Beyond these economic effects, as I mentioned, the social impact of the crisis will also be significant. The outbreak is likely to lead to increased poverty in food and security among vulnerable groups, as well as an impact on employment, including in the key agriculture sector.

Finally, in terms of the Fund, what I can say is, all three of these countries have an on-track extended credit facility program with the IMF. Again, we’re actively working with all three countries to prepare a preliminary economic assessment of the impact of the Ebola crisis -- and additional financing support that may be required.

That’s where we are on Ebola.

Let me also take a question on Ghana that’s asking, can we have a definitive date when an IMF team will be in Ghana?

And maybe just stepping back for those who haven’t followed it closely -- earlier this month, the Ghanian authorities formally requested an IMF program to respond to the economic challenges facing the country.

We expect to have a mission in Accra in September, to discuss a possible Fund-supported program. I do not have a specific date, but in September. And, obviously, as yet, there’s no agreement on what policies might be or the amount of financing and so on. That would be something that would be discussed at the time.

I know that -- well, I see here there’s a couple of other questions on -- Pakistan is facing political turmoils, says the question. The protesting leaders have said that they will not pay IMF installments. What is the IMF’s response?

To which I would say -- again, stepping back -- the mission has had fourth review discussions for the extended Fund facility. Those discussions on Pakistan were held in Dubai, I think, as you know. These discussions have been constructive, and will continue -- do continue via videoconference from Washington. We would expect to update you at the conclusion of these discussions.

And what I can say, even at this point, is while recent political developments have had some short-term impact on financial markets, the authorities remain committed to their homegrown economic reform program.

I’ll take one more question online, and then come back in the room. It’s on Yemen.

And I don’t have that much to say on Yemen, but, again, the Yemeni authorities have requested IMF support for a program, and the Board meeting on that program request, as well as on the 2014 article for consultation, will take place on September 2, in a few weeks’ time.

QUESTIONER: Next week.

MR. RICE: Next week -- thank you, I’m losing track of time here.

Okay, last question, sir.

QUESTIONER: Ukrainian President Poroshenko is soon for his third month since he has taken office. Is there a sense in IMF that his government is implementing the reforms that he was supposed to do for IMF funds? And do you have any concerns on the Ukrainian national currency, which lately has lost a lot?

Thank you.

MR. RICE: You know, I don’t want to get ahead of the Board meeting tomorrow. These are all going to be issues that will be discussed by the Board tomorrow, and we’ll give you a full readout after the meeting tomorrow on those specific issues.

More broadly, on the question you asked about the implementation -- again, I think, as I said earlier, that the most recent assessment we had -- which was about a month ago, and there’s a document you can look at; it’s our end-of-mission statement -- the staff found that the policies had generally been implemented as planned, and we had reached understandings with the Ukrainian government on the policies necessary for the completion of the review.

And, again -- and it’s an important point for us -- the authorities had committed to take a number of policy actions prior to the completion of the review, and they have been implemented.

With that, I’m going to thank you for coming today, and look forward to seeing you in the coming days and in the coming weeks.

For those of you in the United States, I hope you can enjoy the long Labor Day weekend.

Thank you.