## Transcript of a Conference Call with a Senior IMF Official on Greece and AIP _IMF News, June 22, 2017_ ## Source details **Canonical URL:** [Transcript of a Conference Call with a Senior IMF Official on Greece and AIP](https://www.imf.org/en/news/articles/2017/06/22/tr061517-transcript-of-a-conference-call-with-a-senior-imf-official-on-greece-and-aip) ## Other formats - [Markdown version](/en/news/articles/2017/06/22/tr061517-transcript-of-a-conference-call-with-a-senior-imf-official-on-greece-and-aip/index.md) - [Structured JSON version](/en/news/articles/2017/06/22/tr061517-transcript-of-a-conference-call-with-a-senior-imf-official-on-greece-and-aip/index.json) - [Bundle manifest](/en/news/articles/2017/06/22/tr061517-transcript-of-a-conference-call-with-a-senior-imf-official-on-greece-and-aip/bundle-manifest.json) ## Bibliographic details - Published: June 22, 2017 --- ### Context and procedural decision - Date of publication: June 22, 2017 - The Managing Director told the Eurogroup she was ready to go to the IMF Executive Board and recommend approval in principle (AIP) of a new IMF Stand-By Arrangement (SBA) for Greece. - AIP is described as an unusual procedure, used in the 1980s in similar stalemate situations. - Rationale for pursuing AIP now: - Signals that the IMF believes Greek policies are on the right track and worthy of IMF support. - Allows movement forward without compromising the debt relief requirements ultimately needed to release IMF resources. - Provides Greece and its creditors breathing space to avoid a cash crunch next month and supports Euro area and Greek financial stability. ### Debt relief, creditor dynamics, and timing - Current status: - Significant movement by European creditors has occurred over recent months, including "additional measures and additional specifications" referenced in the Eurogroup statement. - However, the IMF does not yet have "enough on the debt relief side to meet the debt sustainability requirements of the program." - Creditor complexity: - The Greek case involves "17 creditors" operating in a currency union, making provision of debt relief inherently difficult because of moral hazard concerns and bailout risks. - The IMF characterizes the remaining issues as a political contest requiring more time for convergence among European partners. - On deadlines: - Past uses of AIP sometimes included deadlines but not always; reference made to the 1980s practice and the Argentina case. - The IMF has not decided whether to propose a deadline in this instance; the Managing Director will decide what to recommend to the Board. - The Senior IMF Official indicated that in the present context a hard deadline may not help resolution because outstanding issues concern underlying assumptions, instruments, and uncertainty treatment that require time to work through. ### Program design, access, and purpose of IMF engagement - Document and Board timetable: - The Managing Director will put together the staff report for the Board. Documents were expected to be finalized "in the next week or so." - There is a clearance procedure and "a couple of weeks to consult the capitals" after issuance to the Executive Board. The Managing Director anticipated this would take the process into July. - Financial magnitude and modality: - When the request for AIP for use of Fund resources is put to the Board there will be an amount; it "has not been finalized yet." - The Managing Director said in the press conference that it would be "well within the IMF’s normal access limits," not exceptional, precautionary, and she mentioned a figure of up to US$2b to offer a magnitude. - Characterization of the arrangement: precautionary—member not required to draw but could do so at any time; IMF terms may be less favorable than ESM terms, so Greece might choose to draw or substitute if desired. - Purpose of IMF involvement: - Principal objective was not to gain additional leverage but to signal IMF support, help articulate a focused macroeconomic policy agenda in the Fund’s own format, and provide breathing space for creditor convergence while avoiding an immediate cash crisis. - The IMF’s engagement leverages its expertise in crisis management and macroeconomic program design and is consistent with a catalytic financing role and burden sharing in past crises. ### Debt sustainability, market reaccess, and exit prospects - The IMF’s conditional stance: - The IMF maintains it will require a debt relief package sufficient to declare Greek debt sustainable before releasing IMF resources. - The Fund will continue to push its long-run assumptions used in debt sustainability assessments. - On market reaccess and program success: - The Senior IMF Official stated: if the IMF did not believe there was a good chance of concluding the program next August with Greece in a sustainable position and ready to return to markets, it would not pursue this route. - Targeted end of ESM Program / durable exit objective: August 2018. ### Political dynamics and catalytic effects - Interaction with Eurogroup and Germany: - The IMF notes the debate over debt relief is primarily a political process within the Eurogroup; many members support a rigorous debt relief package. - The Senior IMF Official argued that coming onboard with AIP does not change the IMF’s conditions for providing resources and does not remove the IMF’s push for sufficient debt relief. - Use of deadlines as catalyst: - The official expressed skepticism that a hard deadline would necessarily facilitate resolution in this context, contrasting it with the 1980s "chicken and egg" situations where deadlines were catalytic because creditor coordination could only follow IMF approval. - The official acknowledged that impending payments (e.g., July payments) have been a motivator for action in recent months. ### Operational and media details - Contact: IMF Communications Department, MEDIA RELATIONS, Phone: +1 202 623-7100, Email: MEDIA@IMF.org - Ground rules: The briefing was on the record with attributions to a Senior IMF Official. *Transcript of a Conference Call with a Senior IMF Official on Greece and AIP, June 22, 2017 — IMF Communications Department* --- ## References - [Argentina and the IMF](http://www.imf.org/external/country/ARG/index.htm) - [Germany and the IMF](http://www.imf.org/external/country/DEU/index.htm) - [Greece and the IMF](http://www.imf.org/external/country/GRC/index.htm) - [Transcripts](https://www.imf.org/en/news/searchnews) - [PRESS CENTER](http://presscenter.imf.org/) - [Managing Director told the Euro group this afternoon](https://www.imf.org/en/News/Articles/2017/06/15/pr17225-imf-lagarde-to-propose-approval-in-principle-of-new-stand-by-arrangement-for-greece) - [approval in principle](https://www.imf.org/en/About/FAQ/approval-in-principle) - [https://www.imf.org/en/home](https://www.imf.org/en/home) _Source: https://www.imf.org/en/news/articles/2017/06/22/tr061517-transcript-of-a-conference-call-with-a-senior-imf-official-on-greece-and-aip_