Transcript of an IMF Press Conference on Europe

Washington, D.C.
October 11, 2013

Reza Moghadam, Director, European Department
Phil Gerson, Deputy Director, European Department
Aasim Husain, Deputy Director, European Department
Ranjit Teja, Deputy Director, European Department
Ángela Gaviria, Senior Communications Officer

Slides of the Presentation during the press conference

MS GAVIRIA: Good morning, everyone. Welcome to this press conference by the IMF on Europe. I'm Angela Gaviria, with the Communications Department of the IMF. Let me turn to the speakers. Reza Moghadam, at the center, is the Director of the European Department. To his left is Phil Gerson, who is Deputy Director in the same department. And to his left is Aasim Husain, who is also Deputy Director in that department. To my left is Ranjit Teja, also a Deputy Director in the European Department. Reza will start with some opening remarks, and then they'll be happy to take your questions. I also encourage people following us online to start sending their questions so we can answer them during this briefing.

MR. MOGHADAM: Good morning to you. Thank you for being here, despite the weather and the early hour.

I think at the beginning of the press conference, I'm going to do something very unusual for this. I'm going to give you a very short presentation to put the European issues in perspective. So, that will take a few minutes, five to ten minutes, and then I'll be happy to answer your questions on what I say and also on any issues to do with Europe or on any countries within our department on which you have a question.

So, if you permit me, I'll start with this presentation. Let me tell you the broad outlines of what I'm trying to do here is to tell you how much the situation has improved in Europe over the course of the last six months to a year, to illustrate to you that financial stress has declined, that growth is picking up, but also that growth is weak, it's fragile, and there are enormous challenges. I'll go through some of those challenges as well as what needs to be done in Europe in order to address the challenges.

Let me begin with financial market stress. In what I show you here, you will see a heat map that will tell you how bank CDS spreads have changed since 2007. If you observe this screen, you will see a little movie that shows how they have evolved. Blue is when the stress is low and dark red is where the stress is very high--higher than 300 basis points. And you see how they have evolved since 2007.

Basically, you see the beginning of problems in 2008 and 2009, the height of the crisis in 2011 and 2012, and this is the latest.

And as you see, the latest slide shows considerable improvement, but there are still financial stresses in Europe, particularly in the south of Europe and the crisis countries, the countries which have programs.

So, those are bank CDS spreads, and you see for comparison the U.S. and Japan. Again, you saw how spreads evolved through the crisis.

Now, I'm going to show you another indicator of stress which is sovereign CDS spreads. Again, keep your eye on the screen. You see the massive blue in Europe, with spreads between zero and 100 percent prior to the crisis. Let me run you the movie. You can see how sovereign CDS spreads evolve, the deterioration in 2010, a lot of deterioration in 2011. We already see improvements in 2012, and this is where we are now, a significant reduction in sovereign stress.

But still, there are elevated stresses in the south of Europe, and this is particularly serious because you have a monetary union and these countries have the same monetary policy, the same interest rate. As shown, bank stress is somewhat higher now than sovereign spreads.

Now, a lot has been said about growth in Europe, and I want to talk a little bit about that.

First of all, growth indicators come out with a lag, but we have a lot of high-frequency indicators, and one of those that many of you follow, is PMI.

What you see here is both PMI and quarterly growth, and you see they are very correlated. So, this is the purchasing managers index, which is an index of economic activity, forward-looking, if you wish. This is the chart up to the end of 2011, and let me just forward it to see what has happened since then. You can see that they are quite correlated, and what you also see is that the PMI has improved and second quarter growth is up, largely in line with the PMI figures. It's an indication that, to us, the recovery that is taking place is for real and there are many indicators of that across Europe. This is for the Eurozone, but if you look beyond the Eurozone in the EU, and also, if you look at our membership in Eastern Europe, concurrent with this recovery in the Eurozone, you see recovery elsewhere.

Just to give you an idea, there are 40-some countries in our department. In 2011, more than half of them were in recession. This year, our projection shows about a third of them in recession. Our projection for next year shows almost all of them out of recession. So, there are only a couple of countries, if you look at the WEO projections for next year, where we are forecasting negative growth. So, the recovery is there.

However, the recovery is weak and the challenges for growth are enormous, and let me go through that. With the recovery weak, not surprisingly, inflation in the Eurozone is low. The latest figure is about 1.1 percent against the medium-term target of 2 percent. One problem is that inflation varies enormously across the Eurozone. Here, I've given the ranges for the upper and lower bound. You see Greece and Spain with negative inflation, and you see Estonia, for example, with higher inflation, almost double the average. So inflation is low. I'll come back to this in terms of policies.

And probably the biggest challenge for Europe is that unemployment is unacceptably high. It's a big challenge in terms of the strength of growth needed to address this.

Now, these are unemployment rates across a number of countries in Europe in 2007. You see they are between 5 and 10 percent, and just note the vertical access here goes up to 15 percent. Let me show you what has happened since. Unemployment has increased massively throughout the crisis, off the charts in some countries like Greece and Spain. This is the average unemployment rate. Let me show you the youth unemployment rate, which is also a particularly difficult problem.

This is the youth unemployment rate. I told you the axis for the average unemployment rate was zero to 15; here it’s zero to 30, and you see a number of countries are off the charts. We couldn't even show some of them on there.

Now, I want to illustrate why the problems in Europe are difficult to address, and some of the challenges. One source of the weakness of the recovery in Europe is what we call the fragmentation in the financial markets, and this chart is an illustration of that.

What I'm showing you here is the interest rate, the lending rate faced by small- and medium-sized enterprises in different countries in the Eurozone. And what you see is that interest rates range from 2 to 3 percent in countries like Luxembourg, Austria, Finland, and Germany. And then, look at the top, they go as high as 6 to 7 percent in a number of countries whose economies have been under stress. So, monetary policy transmission is a problem particularly for small- and medium-sized enterprises.

Now, let me show you a variation of this chart. The lending rates are on the vertical axis. I am going to put the output gap that we have in the WEO on the horizontal axis. One unfortunate observation looking at this graph is that the countries which have the higher output gaps, i.e., the ones that need lower interest rates, actually face higher interest rates. That is a major challenge in terms of strengthening growth in the Eurozone.

Let me bring in the link to employment. I talked about unemployment being unacceptably high. If you look at this chart, on the horizontal axis, you have the percentage of employment which is in the small- and medium-sized enterprises, and on the vertical axis, you have the proportion of these enterprises that report that they have a problem in terms of accessing credit.

You can see the countries which have been under financial stress whose spreads are large and where the lending rates are high, like Spain, Portugal, and Italy. There are countries which have a lot of employment in the SME sector, and they are the countries which are facing difficulty. So, this is a particular challenge, again, for resuming growth for job creation.

And one other illustration of the degree of the challenge to resumption of growth is balance sheet stress across Europe. What I show here is a measure of balance sheet stress on the horizontal axis and growth since the crisis on the vertical axis. The balance sheet stress is pre-crisis, the growth is post-crisis, and you see a dramatic negative relationship between the two. So the message is that you need to deal with the balance sheet stress in order to strengthen growth.

Let me end the analysis with credit growth. Obviously, growth itself requires resumption of credit growth, and I want to show you what has happened to credit growth across the region since the crisis. This is 2007. Blue--dark blue--means high credit growth, dark red means negative credit growth, and the others in between.

So, we had high credit growth in 2007, almost across the region, east and west. Since then, you can see credit growth turning negative, improving a little bit in 2010, but this is the picture right now. Credit growth across the region is either very anemic or is in fact still falling this year.

Against all that background, what needs to be done? We have tried to illustrate the challenge Europe faces by the famous Rubik's Cube. Why is it relevant here? Because the challenges are interrelated. They are complex and, in a way, you have to resolve all of them to reinforce each other and therefore help with strengthening growth and job creation. I will not go through all of this. We can discuss it in the question and answers.

Against the background of what I mentioned to you, repairing the balance sheets –- and I showed you very strong negative correlation between balance sheet stress and growth-- is a top priority. You are all aware of the processes that are going on in Europe in terms of the asset quality review and stress tests to address the underlying problems in the banking system. I hope what I showed you illustrates why it is so important.

EMU architecture. For the last 18 months the Fund has published a number of papers on banking union and on fiscal union. Our Article IV consultations with the members have repeatedly focused on the importance of completing the architecture, and there is clearly progress on this front. Because of, for example, the problem of fragmentation that I showed you, it is important to make sure that the monetary and economic union works for all its members in the intended way. So, completing EMU architecture is essential.

And obviously, support for demand. We have repeatedly underlined the importance of monetary policies, both conventional and unconventional. We have repeatedly, over the last two years, emphasized the need for fiscal adjustment, but in a measured way. There's clearly been progress there.

And one important issue -- one of the reasons that growth in the region, particularly in the Eurozone and the West, is weak -- is that potential growth in these economies is low.

One way of improving that is structural reforms. Again, progress is being made, but it is important in a number of respects.

With this environment, emerging Europe faces particular challenges. We have seen how, for example, the talk of higher world interest rates has had a particular impact in emerging Europe.

This is essentially the picture that I wanted to paint for you to put developments in Europe in some perspective.

Let me conclude that progress has been made, clearly, over the course of the last two years, but the challenges for increasing growth and accelerating job creation are major and require a continued and concerted effort to address particularly the unemployment problem.

QUESTIONER: Several senior European officials have stepped back, it appears, from their commitment to reduce Greece's debt. Specifically, they've talked about perhaps extending maturities and lowering rates. But just as economists criticized the IMF debt sustainability analysis before, and its optimistic growth scenarios, they are saying you cannot reduce Greece's debt-to-GDP to the targets of 124 percent by 2020 and significantly below 110 percent by 2022 by simply doing those measures. Can you convince us that the IMF will hold Europe to its commitment to relieve Greece's debt to significantly below 110 percent? And two, is simply debt maturity extension and lowering of rates enough to reach those targets? Thank you.

MR. MOGHADAM: Let me make a couple of points on Greece first. Let’s remember where we were 18 months ago in Greece. Remember last summer and put what is happening now in that perspective.

Look at the enormous effort that Greece has made over the course of the last three years. Their effort is impressive and it is bearing results.

The economic situation continues to be very difficult, but there are signs of stabilization. There are signs of investor interest, and if you look at what was at the heart of the problem, the indebtedness, the fiscal situation which controls that, the fact that Greece is expected to run a primary surplus this year--by the end of this year--somewhat earlier than projected is an impressive achievement. And if you look at the structural reform efforts in very difficult social and economic contexts, they are impressive.

So, we have seen in the last one year or 18 months that Greece is trying to live up to the commitments it made in the program. Given the magnitude of the problems, these are still early days. There is a long way to go, unfortunately.

We talk about these debt targets but remember, right now, debt is much higher. The European commitment was clear, it was an important turning point in terms of sentiment on Greece, and I think we expect that the European leaders that made those commitments will live by those commitments.

Remember that the commitments were two-sided. Greece delivering on its program, which is working well, but there is still some way to go. We are in the middle of discussing the latest review. The mission will go back at the end of this month to continue that review. So, we are still in the process of completing that review. The commitments on debt that were made by the European partners are contingent on Greece delivering, but these are also commitments which are not for now. They are for when there is a primary surplus, and when other commitments have been met on the structural front, on privatization, etcetera.

So, our view is that there is a commitment, we believe the European leaders will live by that commitment, but it is also not the right time to judge whether Greece has met its commitment, and whether it's time for European leaders to meet their commitments.

And there are a large number of indicators that will go into the debt sustainability analysis. We have to wait and see what happens to growth, what happens to the primary balance, what happens to privatization, etcetera.

So, it is an interesting debate, but I think it's too early for that debate.

QUESTIONER: So, can I just be clear if I understand you--I don't want to misunderstand what you're saying--I appreciate your patience with me. It sounds like you don't know or it's not clear whether a haircut will be needed or not. From what you're saying, it's still open. It could be that debt maturity extensions and lower rates will be sufficient, as Klaus Regling has said. Obviously, he has enough data to make that determination, but the IMF does not.

MR. MOGHADAM: No, don't put words in my mouth. I said there would be a time to assess this. This is not the time. A number of issues will go into this--we have projections, of course, but projections change, as you have seen. The time to assess this is perhaps in the middle of next year, but there are commitments. We expect that people will live by them.

QUESTIONER: We are speaking about Europe, but can you tell us something about the situation in the Balkan region, especially countries of the former Yugoslavia.

MR. MOGHADAM: Let me say some general words and then I will ask Aasim, who oversees our work in that region, to say some words.

We are engaged either through our normal surveillance processes or, in some cases, through programs with a number of countries in the Balkans. And let me make a general observation. I started my career in the Fund over 20 years ago and I spent some time working on the Balkans. The progress that these countries have made, if you look at any of them, in the last 20 years, is astonishing. It is very impressive.

Now, these countries have particular challenges. We are, for instance, looking at how to accelerate growth in a number of these countries; potential growth in some is not as high as we would like to see. But the progress that has been made, in terms of stabilization, in terms of growth, in terms of structural reforms, has been quite impressive in the Balkans. Now, there are specific challenges, country by country, if you wish to go into that, we can discuss it. But with that overview, let me pass to Aasim.

MR. HUSAIN: The challenges in the Balkans differ somewhat, obviously, country by country. But for the region generally, I think the story is similar for that of Europe, that there are signs of some pickup in growth in the first half of this year, generally. Now, in most countries this is coming from either a contraction or very, very weak growth that has gone on for some time. These signs are encouraging. It also partly reflects the pickup or some improvement in Europe, which is, of course, a key trading partner.

But this pickup in activity is, at best, a tepid pickup, and a fragile one, not least because of the situation in global financial markets right now and the need to be ready to address or to meet any challenges related to a drying-up of capital flows.

The big near-term challenge, I think, for countries in Central, Eastern, and Southeastern Europe generally, and specifically in Southeastern Europe is that the fiscal buffers that the countries had have been used up since the crisis. So, public debt ratios have risen quite a bit and, in many cases, deficits are quite high. This gives rise to pretty large financing requirements, and those can be difficult if world financial markets tighten going forward.

Longer term, as Reza mentioned, the challenge is to revive growth. Growth since the crisis has been much, much weaker than in the period before the crisis, and this is a challenge that will have to be addressed. One really big byproduct of that challenge is unacceptably high unemployment, and in many countries in Southeastern Europe it's well over 20 percent. So, this will have to be addressed with urgency.

Just to advertise a little bit, we will be releasing next week a regional economic issues paper that looks at the challenges in the whole Central Eastern and Southeastern region. We will actually present it the week after in Southeastern Europe. So, I hope you will come to that.

MS. GAVIRIA: Yes, it's actually going to be launched on October 17th in Warsaw.

QUESTION: In your documents we just read that Slovenia is the only Eurozone country with negative economic growth for the next year. Could you comment on the situation in Slovenia, what should be the challenges for the Slovenian Government, and could you tell us about the achievements in the last, let's say, six months or something? Is there a light at the end of the tunnel? As you know, we have terrible economic statistics right now.

MR. MOGHADAM: Let me say a few words and then I will turn to Phil, who oversees our work on Slovenia. I think you are right, there have been several years of economic contraction or stagnation in Slovenia. The economic situation has been difficult. And you're also right that our projections show that this difficulty continues this year and next year.

We will have our Article IV conversation with Slovenia starting the following week for a couple of weeks. We will have an opportunity to update our understanding of the Slovenian economy. It is correct that progress is being made, particularly in the financial sector, to look at the balance sheets of the banks and look at the recapitalization needs, that's very important.

The problems in Slovenia also require broader structural reforms in the public sector and in the corporate sector. So, those are also issues that we will be looking at during the forthcoming Article IV. Phil?

MR. GERSON: It's been a difficult few years in Slovenia. Slovenia has a problem with a banking sector that has high levels of non-performing loans. It's got a corporate sector that's highly leveraged, it's very highly indebted. And it's got sizable fiscal consolidation needs, both to deal with the impact of the recession on the finances and on the debt ratio, which has risen over time, and also to deal with the likely costs of bank restructuring. So, it's clear that there's a lot of work to do in Slovenia.

In terms of what's already been accomplished, the authorities have done a lot. They've established a bank asset management company, which is a major step forward in cleaning up the banks. They're undertaking a balance sheet assessment now that will give clarity about the size of the recapitalization need in the banks. They've identified a list of companies for privatization, which is important not just because it can provide resources to the budget, but also because it will help further open the economy to trade and to efficiency gains from that. So, I think there's a lot that's already been accomplished in Slovenia. It's clear the authorities have a lot of work that remains ahead, too. As Reza said, we have an Article IV mission coming up very shortly that will engage in a discussion with the authorities on all of these issues and come up with some recommendations, and we look forward to learning more about what the authorities have accomplished and to engaging in a full dialogue with them about what their plans are going forward.

QUESTIONER: You've been urging for some time the ECB to do something either on the conventional or on the unconventional side to make its policy more accommodative. Now, inflation is going down, growth is very anemic. It's negative, still, in many countries. There's no credit growth--actually, there's negative credit growth. What do you think it will take for the ECB to actually heed your advice, because they've been stuck for several months? The other question is about the adjustment of the imbalances within the Eurozone. Most of the adjustment is now in terms of the current account and competitiveness. Most of the adjustment has been done now through contraction or adjustment in the deficit countries. Would it be your advice that several countries, namely Germany, should also do something to complete the adjustment?

MR. MOGHADAM: First of all, in terms of monetary policy and the stance taken by the ECB, I think let's first acknowledge that the ECB has taken significant steps to stabilize the situation and to provide the basis for growth. If you go back in terms of the liquidity to the banking system, the LTROs were very successful in providing liquidity and reducing stress. Look at the safety net provided by OMT. Look at the conventional easing that has taken place in terms of policy rates that are at a record low in the Eurozone. So, you have to acknowledge that the ECB has done a lot, and a lot of problems that are faced in individual countries stem from country-specific problems that need to be addressed. They cannot be solved by monetary policy by itself. Monetary policy can help, and it can provide room and time to address the underlying problems, but it cannot solve the underlying structural rigidities that some of the economies suffer.

Now, having said that, we will have again a consultation with the European partners, including the ECB, this coming December, but we are on the record in the July Article IV consultation urging for more conventional and unconventional easing to be considered. I showed you the chart on inflation. The latest figure on inflation is 1.1 percent. Of course, the ECB 2 percent target is a medium-term target, but in the forecast horizon that we see, at least for ourselves, we see inflation to be below target.

So, there is room. The problem, of course, is what I showed you on lending rates, particularly the rates faced by the SME sector. It's also a question of the transmission of monetary policy and, in that sense, unconventional measures also need to be on the agenda because monetary transmission is working in some countries, but not in the others.

Now, in terms of surplus and deficit countries, I think the same answer in a way applies to that. If you look at some of the surplus countries and if you simply increase demand in those countries, you are not going to have the benefit, necessarily, in the Eurozone. In fact, most of the benefit will go outside the Eurozone, some within Europe, but also a lot outside Europe.

That has to do with the structure of these economies. If you want the demand to have more of an effect within a zone, then there is need for structural changes also in the surplus countries.

Again, if you look at the last Article IV for the Eurozone, we have been urging for structural reforms in the core countries, in the countries with surpluses, particularly service and trade reforms. Thank you.

QUESTIONER: Do you see a possibility that, given the mess that we're observing here in the U.S., capital flows will reverse and start flowing into the region, rather than out of it? Specifically, on Russia, they are creating a mega-regulator within the central bank. So, how do you view that? Do you think they have the necessary resources to regulate the banking sector--and shadow banking, by the way--and is there a potential conflict of interest with this decision? And finally, on Ukraine, very briefly, given the track record of that country, do you see a possibility of a program coming together for them soon?

MR. MOGHADAM: Let me answer the question on Ukraine and I'll ask Aasim to answer the question on Russia. I think we know the interest of the Ukrainian authorities to engage in program discussions with the Fund. We have had discussions on and off, we know of their interest. But also, Ukraine faces very difficult challenges, particularly on the structural fronts, and for there to be a realistic chance of a Fund program, it is imperative for us to have openness by the government on the reform agenda.

So, I hope that openness would be there. It has not been there so far. We have had some dialogue, but the dialogue has been dormant for some time. We are happy to resume that dialogue, but it would only succeed if we can see a degree of seriousness in addressing some of the challenges, some of the reforms needed in that country.

MR. HUSAIN. First, on your question regarding capital flows, since May of this year, since tapering talk began, there's generally been capital outflows from emerging markets. Russia has also experienced some downturn in financial markets, in equity prices, and in capital flows. But the impact on Russia has been less than in other emerging markets, partly reflecting the fact that inflows into Russia in the period before were not as much as in other emerging markets. Partly, it reflects the fact that Russia's fundamentals are actually quite strong. It has a current account surplus, its fiscal financing needs are very small, public debt is very little, and so on.

So, whether one would expect large inflows into Russia in the period ahead, my guess would be probably not, but in fact, depending on the types of shocks that are experienced in the financial system, one could even ask the question whether there might be outflows. But again, I think the recent experience suggests that Russia would not be in the forefront of vulnerabilities.

On your question regarding the Central Bank of Russia's new role as mega-regulator, I don't think there's a universal answer as to what is best, whether regulation over all parts of the financial system is best housed under one roof or under separate roofs. But certainly, one advantage of having them under one roof is that regulatory arbitrage between the banking and the non-banking sector is, in principle, reduced. The Central Bank of Russia does have adequate capacity to handle these challenges. But of course, having all supervision under one roof will bring some challenges.

MS. GAVIRIA: I'm going to take one quick question online to acknowledge those following us and then I'll take one from the room. This is related to the euro area: your recommendations contain also financial integration. What exactly do you mean by this?

MR. MOGHADAM: I assume it refers to the banking union proposals that we have made. Very briefly, if you have a single currency, if you have a single market and the interest rate differentials are as large as they are there, there are obviously two sources. One is country-specific issues that need to be addressed, and the other one is making sure that the transmission mechanisms work, that the fragmentation in the financial market is reduced; hence, the proposals on banking union. And I think the elements are well-known. The elements are a single supervisory mechanism, a single resolution mechanism with strong powers to enhance the credibility of the single supervisory mechanism, and some form of backstop in order to make the whole system work and credible in the long run. That's what we mean by improving financial integration.

QUESTIONER: I would like to ask you a question concerning your Rubik's Cube in relation to Spanish debt sustainability. Most people when they're confronted with a Rubik's Cube generally end up fiddling about with it for probably an hour, figure out it can't be done and then throw it in the bin. And that's the impression that a lot of people maybe might have of the way Spanish debt dynamics play out. In the WEO, Spain is the second country in the Eurozone most vulnerable to deflation after Greece. You also have average yearly growth rates of 0.3 percent from 2011 to 2018, and beyond who knows? It would appear that deflation is necessary to resolve Spain's competitiveness problem vis-à-vis the European core. It would appear that those low growth rates are necessary to avoid a reemergence of current account problems in Spain. The question is, coming back to the Rubik's Cube, how do you make Spanish public debt sustainable? It's gone up from 40 percent to nearly 100 percent since 2007, with growth rates of 0.3 percent, and deflation…

MR. MOGHADAM: Let me just say a few words, and I'll turn to Ranjit, who oversees our work on Spain.

Probably Spain is a good example of the dexterity with which Rubik's Cube can be aligned. Look at where Spain was 18 months ago. Look at where the sovereign rates were, the concerns there; sovereign ten-year bond yields were over 10 percent. They are considerably lower now, hovering just above 4 percent or so. We saw yesterday that they issued a 30-year bond, which was highly oversubscribed. There has been a seriousness in dealing with the financial sector problems over the course of the last year, and Europe has also stepped forward and helped Spain with that restructuring by providing a financial support package. And there has been fiscal consolidation but the pace of that has been adjusted. Excessive deficit targets have been adjusted to make the pace of consolidation more growth-friendly, if you wish, or having less impact on growth than it otherwise would have.

With the financial sector problems that have been there, and the fact that the economy has been in a recession for several years, it is not surprising that the debt has increased. The issue is putting in place the conditions needed for growth to resume and for the budget to be under control in order to address those debt issues, and I think the Spanish have done a very good job of handling that over the course of the last 18 months or so. And you see the result in the improved competitiveness and market share that they are gaining in their export markets. So, I think I'll take your example and turn it around and say it is a case where Europe and Spain have worked together to address their problems. Ranjit?

MR. TEJA: I don't have much to add to that, Reza. I will just say that we have a very cautious projection for growth going out. And you're completely right: When growth rates are very low, it's difficult to bend that curve down -- the debt trajectory -- more sharply.

But Spain also has an upside scenario, which they could very readily achieve based on a much more aggressive reform agenda. We have laid this out in our Article IV reports. A lot of this revolves around strengthening labor markets and wage adjustment so that you don't have this situation where the adjustment that we see in Spain comes about all through labor shedding. That is not a feasible way of adjusting your current account and your debt problems. So, we do see strong structural reforms as something that could deliver a much faster reduction in the debt loads in Spain.

MS. GAVIRIA: Thank you very much. We end this press conference, here. Thank you all for participating.



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