Transcript

Thursday, September 9, 2010
Washington, D.C.

MS. ATKINSON: Good morning, everybody. Sorry for the delays there, accommodating you all. I’m Caroline Atkinson, the Director of the External Relations Department at the International Monetary Fund, and this is the regular briefing. As usual, the briefing is embargoed until 10:30 a.m. Washington time, 1430 GMT.

So I’ll just begin by letting you know some upcoming travel and events. The Managing Director is traveling to Europe for an important conference that we’re holding in Oslo on Monday, jointly, with the International Labor Organization, and the Norwegian government. The topic of this conference is something that is on a lot of people’s minds now which is unemployment, employment growth and jobs. And a number of high level participants will be there from the labor community, politicians including President Johnson Sirleaf from Liberia, Prime Minister Zapatero from Spain, Prime Minister Papandreou from Greece and, of course hosting, Prime Minister Jens Stoltenberg from Norway. Christine Lagarde Finance Minister will also be there, and Iain Duncan Smith from the U.K. Their aim is to bring people together to look at ways to promote a recovery that provides jobs and to discuss some of the costs of all of unemployment and joblessness that are broader than just those that hit directly onto the unemployed.

We have a special web page on this conference and accreditation is available through that, and it’s also Conference2010.org. Through the IMF web page, there’s a conference web page as well.

Then on September the 16th, next week on Thursday, at 3:00 here, the Managing Director is going to deliver opening remarks preparatory to a panel that we’re holding tied to the upcoming U.N. Summit on the Millennium Development Goals. Our panel discussion will be on reaching the MDGs, the macroeconomic prospects and challenges in low income countries. After the Managing Director’s remarks, we will have a panel discussion with Nancy Birdsall from the Center for Global Development, Professor George Ayittey, who’s the President of the Free Africa Foundation, Mark Plant from our African Department, and Hugh Bredenkamp from our Policy Department, to discuss a paper that we’ve done and the more broad challenges for reaching those goals.

Then on September the 20th, the Managing Director and Special Advisor Min Zhu and others will be in New York. He will be speaking at the summit. He will also, in the afternoon, participate in another event with the ILO that is called “Sustaining Growth for Investing in People.”

Turning to the Annual Meetings, I will discuss the schedule in more detail at my next briefing. We expect a very different kind of Annual Meetings this year, more open and more high level discussions and so on that will be open.

We will be releasing, as usual, ahead of the Annual Meetings the World Economic Outlook forecasts and the Global Financial Stability Report. And the analytical chapters of the Global Financial Stability Report will be released on Tuesday, September the 28th, and then the following day, September the 29th, we will release the analytical chapters on the World Economic Outlook. As usual, we’ll have a press conference for those events, and we’ll circulate more details later.

So I’d like to turn to your questions and please identify yourselves and your news organization ahead of time. And I invite journalists that are using the Online Media Briefing Center to submit questions online. Some of you already have. But I’ll start with any questions in the room.

QUESTIONER: I have two questions, one regarding Greece. We’ve been hearing a string of comments lately from Germany saying that the IMF is not stringent as perhaps it would on the Greek program. So I’d like to see if you have a reaction to that. And second story, we’ve also had press reports on Argentina would be ready to go through an Article IV to negotiate its debt to the Paris Club. So I’d like to see if that’s something in the works.

MS. ATKINSON: Thank you. So, on Greece, I would just refer you to the last joint press conference actually with the European Commission and the European Central Bank and the IMF after the last visit to Greece, where we had a joint statement about the progress under the program that has been very satisfactory. And the program, as you know, was fully agreed at the Board. So I don’t have any other comment on reports of conversations and so on.

ONLINE QUESTIONER: Argentina hasn’t done an Article IV consultation for a long time. When will they do that? Will there be sanctions? Have the authorities contacted the IMF to coordinate a future visit of the Fund?

And, as you know, I’m going to be perhaps a little bit boring on this. We remain engaged with the authorities in Argentina. We have a Resident Representative on the ground in Argentina, and we remain ready as we have been for some time to conduct Article IV negotiations. We don’t have any specific timing or mission planned. And I guess on the question of the authorities’ reactions, or the authorities’ views, then of course I’m going to refer you to them and not to us.

QUESTIONER: So it means you haven’t had a request from Argentina?

MS. ATKINSON: I’m not aware of any request from Argentina that has recently been received, which doesn’t mean that they may not be thinking of one, and their new executive director will be coming soon.

QUESTIONER: When will the IMF complete the third review of the Icelandic economic plan?

MS. ATKINSON: We have reached agreement at a staff level with the Icelandic authorities on the review, and we fully intend to present that to the Board as soon as possible, mostly likely in September, as I think we reported earlier.

QUESTIONER: But there hasn’t been a date yet for a meeting of the Board?

MS. ATKINSON: There is no date yet set for the meeting of the Board.

QUESTIONER: But the representative of IMF said that it will be completed in the early September. So do you expect any delays?

MS. ATKINSON: We’re expecting that we will bring the program to the Board as soon as possible in September. As you know, for all of our programs we have to have financing assurances, but we expect that we are working to bring the program to the Board in September.

QUESTIONER: Icesave isn’t going anywhere. It hasn’t been resolved yet. Do you think that will yet again have some effects on the completion of the review?

MS. ATKINSON: As you know, Icesave has never been a condition in the IMF programs, and indeed we’ve had a review not that long ago. What is important for the Icelandic program, as any other program, is for us to be assured that there is sufficient financing for the program, and that’s what we’re working on.

QUESTIONER: It was long started with the official talks between the Ukrainian government and IMF about the new $15.1 billion loan. Less than a month ago, it was a decision of the Board. And what is the situation right now? Is the IMF satisfied with the Ukrainian reforms, which were part of the country’s obligation due to providing a special kind of monitoring?

And one more question, the country is expected the new tranche during the nearest month. Do you have any official information about the possibility of the new tranche for Ukraine? Thank you.

MS. ATKINSON: I’ll start with your last question which is about when there would be the next tranche of the loan to Ukraine, and typically with the IMF those are paced on usually a quarterly or that kind of gap. The program was approved in July. So there would be normally we expect a mission to go out, to discuss with the authorities and to assess the next, for the next tranche sometime later in the fall—October, November. And then sometime—then they would write a report. That would go to the Board, and the Board would approve it. So we’re looking at a process of the normal calendar would be that that new tranche would come in, you know, after some months.

In the interim as far as I’m aware, and we have a Resident Representative, as you know, in the field in Ukraine, things are proceeding. Of course, we will at the time of the review go and discuss with the authorities whatever the latest data are there, but the program is proceeding.

QUESTIONER:I just wanted to know what the IMF was thinking of the new stimulus measures announced by the U.S. and does that conflict with the fiscal concerns, or whether it’s a good thing for the economy.

MS. ATKINSON: We did mention, you know, the U.S. Article IV consultations reports were published earlier in the summer, and they did envisage the possibility of further measures to support the economy, given the underlying weakness in the economy. And that can be consistent with the medium-term, longer-term consolidation, that to which the authorities committed. So that’s our main comment.

And we’re looking, of course, still at the details of the package. It’s obviously important, as I was mentioning, in the context of Oslo to be addressing issues of jobs and unemployment. It has—then this package certainly the potential to boost investment and job creation.

ONLINE QUESTIONER: In Pakistan the scope of the flooding is indeed terrible, and 60 percent of the population is in poverty. Why are we not considering debt forgiveness and grants and so on?

MS. ATKINSON: I think this question we also dealt with last time. We are assessing. There’s a damage assessment being done now by the World Bank and the ADB. We expect there will be some results in late October. Of course we know the damage is terrible, and in particular the social and political damage is very bad. And last week, we announced agreement on an emergency loan which will be disbursed very quickly once it goes to the Board. We don’t have a date yet. That’s called ENDA, Emergency Natural Disasters Assistance. So we are playing our part in that way.

QUESTIONER:I just wanted to see if you could give us an idea of how talks are advancing at the Board on consolidating European chairs or not and if you expect a decision by the Annual Meetings. And on Iceland, I’m not sure I understand. Even though you have a staff level agreement and when you say the whole financing is needed, are you alluding to talks on the side with the U.K. and, you know, the other countries, or is that independent?

MS. ATKINSON: On Iceland first, the Icelandic program is financed by the IMF obviously in part and also by some other countries, and we need to be assured going forward that Iceland’s program will be fully financed. It’s something that we need to reassess as we’re going on. So I’m not talking about side talks with the U.K. and the Netherlands. The staff level agreement is on the measures that need to be taken by Iceland in order to meet the targets that have been set out in the program, and that’s what we’ve reached agreement on.

On the Board, this is an issue for the membership to resolve. It’s not an issue for the IMF staff or Management. It’s an issue for the membership to resolve. And all that I would underscore is the importance of the November 1 deadline, which I think everybody understands. The membership is working hard, I believe, to try to meet that deadline.

QUESTIONER: I have a more generic question about Europe. There have been doubts in the past few days about the legitimacy of the bank stress tests, and also there are rising concerns about a gap between the so-called sort of rich countries within the European Union, notably Germany and the Southern countries, and sort of a growth gap that is widening. Does the IMF have any views on that, about the stress tests and the growth rate within the Euro Zone?

MS. ATKINSON: Okay. So on the stress tests, we commented at the time that they came out that this was a very important step—the degree of disclosure and information that was made available by the Committee of European Banking Supervisors.

QUESTIONER: -- Test of the markets basically.

MS. ATKINSON: Yes. Well, you know markets move. I’m not going to comment on markets’ movements. We will be issuing, as I mentioned, on October the 5th the Global Financial Stability Report that will look at a number of topics about financial sector stability. And on the growth divergence, well, we will be having our latest forecasts in, again issued in a few weeks’ time. Just off the top of my head, I’m thinking that in the last forecasts it may be that there were divergent growth patterns to some extent in Europe. I’m not sure whether it’s between big and small so much, but --

QUESTIONER: Or North and South.

MS. ATKINSON: Well, obviously some countries that have been suffering, that had financing issues, in particular obviously Greece, we know, I know that we were expecting and incorporating into the program that there would be a decline in output even this year and next year. That was all sort of expected, to build the path for the recovery, whereas Germany has been growing. So—but I’m not sure that there is sort of new news on that.

ONLINE QUESTIONNER: In Serbia, protests are planned because of the IMF’s requirement that pension costs be cut, and please describe your suggestions for Serbia and their impacts on lower income workers.

MS. ATKINSON: I’m not going to get into the specifics of Serbia, but just to say that, as you know, governments, when they have financing difficulties, need to figure out ways to adjust their borrowing requirements. When we’re supporting them with a program we’re helping to finance part of the gap, and they are expected to take measures to help phase out that financing gap. Often, these may involve spending cuts and tax increases.

What we do think is that there are difficult tradeoffs that need to be made by governments. And more recently as we’ve been focusing in the last, I think since the crisis began, on the importance of social conditionality and making sure that our programs take account of the need to protect the most vulnerable. Within that, governments make choices.

Well, thank you all very much, and we will be having the next regular press briefing in two weeks’ time, on the 23rd of September. Thank you.