Transcript of a Press Briefing by Gerry Rice, Director, Communications Department, International Monetary Fund

Washington, D.C.
Thursday, February 19, 2015
Webcast of the press briefing Webcast

MR. RICE: Well, good morning, everyone and welcome to this regular press briefing on behalf of the International Monetary Fund. I'm Gerry Rice of the Communication Department and as usual, our briefing this morning will be embargoed until 10:30 a.m. and that's Washington time.

Let me begin with a few announcements. Then I'll come to questions from our colleagues in the room and also online.

Beginning with some travel by the management team here at the IMF, I would like to tell you that as part of our ongoing work on the role of women in the economy and economic issues, the Fund will be publishing a staff discussion note next week, Monday, February the 23rd that will explore how legal frameworks can support women's participation in the workforce.

We're releasing it in time for International Women's Day which is on March the 8th. To launch this paper, the Managing Director, Christine Lagarde, will be in New York on Monday including for a conversation with the Huffington Post that will be streamed live on Monday morning. So again, this is the next increment in our ongoing work on that issue with a paper to be released on Monday.

Our first Deputy Managing Director, David Lipton, will be in Africa the first week of March, the 2nd till the 7th, and he will be in several countries including South Africa, the Democratic Republic of Congo and Mauritius. We can give you more details on David's events if you like.

Our Deputy Managing Director Min Zhu will be in Nicaragua on March 4th to meet with the authorities and various civil society academic business groups and so on. That's it actually for the announcements. Happy to turn to your questions.

QUESTIONER: As you understand, we are going to start with Greece and my first question is dealing with -- allow me to say it, with this mess, with this chaos between Athens, Brussels and Berlin. I wanted to know if you have any role in these negotiations between Athens, Berlin and Brussels. And if you have, what is your position on the proposal from Athens?

MR. RICE: Let me set this in context a bit for those who may not follow it as closely as you do. The discussions right now are around the possible extension of the European program to support Greece, which expires at the end of February this year.

The IMF program supporting Greece is scheduled to run until March 2016. So it does not need to be extended at this point. Factually, just to be clear on the two programs, they're related but they are separate programs as well.

You asked where have we been, so let me give you the status of that. We've been in discussions with the Greek government together with the European Commission and the European Central Bank to better understand the new government's plans and priorities. Those discussions continue and we continue to stand ready to work with the Greek government and our European partners going forward.

Now, on the request for extension of the European program, that's obviously the European program, it's for the European partners and the Greek government to decide how best to handle the possible extension of the expiring European program or steps towards a new program.

For the IMF part, again, our extended arrangement, the EFF, continues until 2016. I think you were referring to various reports this morning…


MR. RICE: I wouldn't comment on various reports as you might expect. We will be looking at the Greek government proposal carefully and in the context of the ongoing discussions with the Greek government and the European partners, including in the context of the scheduled Eurogroup meeting tomorrow.

QUESTIONER: Okay, so your agreement with Athens is staying as it is, as I understand. The second thing is that according to Athens, the Troika format is no longer alive. I'm going to tell you exactly what they say. They say the Troika is dead. We understand that is no longer desirable for Greece to deal and negotiate at the same time with the IMF, European Commission and ECB. Question: is this possible? For you the Troika is there, the Troika is alive. Do you agree to contact, negotiations with Greece?

MR. RICE: I think we talked about this the last time. Let me reiterate then a bit. I think the exact working arrangements for going forward between Greece, the European partners and the IMF are something that is under discussion and that's going to be a topic, I would think, still to be discussed as these meetings continue.

So I wouldn't want to get too far ahead and saying what precisely the modalities will be but I think it's something for discussion. I think on what we're looking for, the IMF is clear and I think we've been consistent on that. And that is an agreed process that would help develop a credible, strong policy framework which is essential to help stabilize the current situation and obtain or raise needed financing.

So we want to do our best to achieve that outcome. That's where we are.

QUESTIONER: Just on Greece, to follow up on the needed financing, I was wondering if you could update us on what the IMF's assessment is of Greece's financing situation. If how much more money do they have before they need another infusion of bailout cash?

MR. RICE: We talked about this two weeks ago and I don't have much beyond what I said then which is that given the election, given the subsequent discussions which are continuing, we've not been on the ground to make an assessment of the Greek economy. It's a very fast-moving, fluid situation. We all know that and we've not been able to consequently update our forecast and make an assessment of the exact economic situation.

QUESTIONER: I have two questions on Greece. First of all, do you think that the current situation could set off the kind of turmoil that was feared back in 2010, and also, could the IMF still work with Greece even if the Europeans are not on board?

MR. RICE: On your first question, I think everyone, on all sides of this issue, is working very hard to ensure that any risks to financial stability could be minimized and addressed. I think everyone is working in very good faith on all sides to make sure that that would be the case.

Now, on our program, it's speculative to say whether it would be going forward on its own or with or without the Europeans. We are in the discussions right now. I think we should let those discussions conclude and then, we'd be in a position to give you a complete answer.

QUESTIONER: What's your assessment on the current risk, the financial risk, for the euro zone?

MR. RICE: I don't really have a comment on the risk but just to say I think everyone is working on all sides of this to ensure that any risks would be minimized and addressed. That's what we're all working toward.

QUESTIONER: I have two questions. I'll ask them individually on Greece. First of all, has Greece requested a new program?

MR. RICE: From the IMF?



QUESTIONER: Secondly, if you go back to the 2012 EFF documents, it makes it pretty clear that at the time the IMF recognized that Greece's debt was unsustainable. In fact, I believe there was a waiver of the IMF's sort of traditional standards on debt sustainability. What is the IMF's current position on Greece's debt burden?

MR. RICE: On the debt issue, on sustainability, it falls into the same category as the overall economic situation in the sense that we haven't been on the ground to look at the details and get the technical data and make an assessment of where the economy stands, and therefore the debt sustainability analysis which would need to be updated in the context of the next review of the program.

More broadly, as we mentioned the last time we were here, there is a framework for Greece's debt sustainability that was agreed by the European partners and I referred to that the last time.

QUESTIONER: Can I ask just a quick question on Ukraine. Obviously, the situation on the ground there is deteriorating military. The con -- the truce doesn't seem to be holding. Are there any conditions, if you will, in the IMF agreement that some type of truce, some type of halt to the conflict must hold before the funds can be dispersed?

MR. RICE: No, we don't have conditions specifically on that. But what we have said when we announced this last week was that, I mean, of course, the conflict is something that we are concerned about and monitor but the new program makes very conservative assumptions in its baseline scenario for 2015 to buffer a further impact of the ongoing conflict in the east.

Of course, again, we're concerned and we would hope for a resolution of the conflict as soon as possible but no specific, you know, not a specific conditionality along the lines you've mentioned.

QUESTIONER: Can I follow the Ukraine?

MR. RICE: Yes.

MR. TORDJMAN: Could you please tell us when the board is expected to me with you the agreements that was announced? And also, could you maybe tell how you get to this 40 billion number because the IMF only pledge 17.5. So how do you get to this 40 billion? Is there any kind of haircut or can you please give us some detail on that?

MR. RICE: Yeah, so just again for people who haven't followed this, the IMF announced a staff level agreement last week with the Ukrainian government for a four-year program for about $17.5 billion from the IMF and that was last week, last Thursday.

I can tell you, Jeremy, that the board has planned for the end of this month, the end of February or early March. When we announced the staff level agreement which, of course, is subject to that approval of our board which you've referenced, we did refer to, as you say, a total financing package of about 40 billion.

Where we expect -- anticipate that money to come from is various sources. You know, the IMF has obviously made a commitment. Some bilateral, multilateral donors have already made commitments as well. There may be more commitments and, in addition, the Ukrainian authorities have already announced that they are preparing to engage with the holders of their sovereign debt with a view to addressing their debt issues.

So I think, in answer to your question, it's going to be the 40 billion is what we have assessed as the needed financing package and we anticipate that that will come together. But, you know, coming from these various sources, I don't have a specific breakdown of which numbers by which -- from which source. But that is certainly something that will be discussed by the board when they come to it at the end of this month or early next month. And that would be something we'd be able to share with you then in the documents.

QUESTIONER: If I can just follow-up, actually the IIF, you know the International -- Institute of International Finance?

MR. RICE: Finance, yeah.

QUESTIONER: Just expressed concern yesterday that the private sector, I mean, the contribution of the private sector was taken for granted and they were talking about 15 billion. And they expressed the concern that they were, I mean, that, yeah, their contribution was taken for granted even while the negotiations haven't started yet. What do you answer to this -- to them?

MR. RICE: Well, you know, it's a matter for the Ukrainian authorities and their creditors to determine not for the IMF. So we leave that to them.

As you probably know, again, and every Fund supported program, we define -- we try to define the overall financing envelope that we think should be available during the program period. And again, there are various ways to obtain that financing. I've described the broad areas. And again, it's up to the authorities and their creditors on the debt issue.

QUESTIONER: The IMF as late as September/October still spoke about Ukraine's program as having a high debt sustainability. So I guess it seems like the most recent program does assume that there's going to be some kind of renegotiation of this debt. So why did it change so quickly? And then, Ukraine's government did give some figures for that. So, I'm wondering how you can assume how much you can gain from that without even having had the discussions with the bond holders yet?

MR. RICE: Yeah, as I said, we have not made an assumption on that number, Anna.

QUESTIONER: Okay, so it's just (inaudible).

MR. RICE: Yeah, it's for the Ukrainian government and their creditors to decide. So we have not made an assumption. What we've made an assumption on is the overall financing package that's required and that can come from various sources. The Ukrainian authorities have already announced that they plan to engage with their debt holders. So that's kind of where we stand.

Andre, are we on Ukraine?

QUESTIONER: Yes, thank you. I'm sorry if I -- for being late. I wanted to follow-up on Ukraine. What is your current understanding of the range -- the current debt to GDP ratio in Ukraine? And also, I had something else here but it'll come back to me.

MR. RICE: Yeah, I don't have that number for you, Andre. But that will be something that will be discussed with the board and that information will be made available to you but not today.

QUESTIONER: And do I understand correctly that the financing package, the overall understanding, needs to be reached before the board meeting? That is before the end of the month?

MR. RICE: You know, I think it's fair to say that there would need to be a good basis for the financing package to be secured for the board to have a meaningful discussion. So --

QUESTIONER: Frankly, I don't understand. What is a good basis? So it's not necessary --

MR. RICE: Well, we've said the financing package is 40 billion. So I think we would need to be in a position to discuss with the board how that is coming together in more of a concrete way. Are we on Ukraine?


MR. RICE: Good morning, Ian.

QUESTIONER: Good morning.

MR. RICE: I'm going to take this question on Ukraine. I'm going to move on (inaudible) --

QUESTIONER: Apologies for my tardiness.

MR. RICE: -- no problem.

QUESTIONER: Just to follow-up here, it sounds as though the 40 billion has not been concretely promised or put together from both your comments. And that's different from what Madam Lagarde said last week where she said yes, yes, yes, it is absolutely agreed upon. Can you clarify that there is not -- you do not have assurances from all the parties that you are assuming will make up that 40 billion?

MR. RICE: I think what, I mean, I think we're consistent in saying we have confidence that the 40 billion package, financing package, will come together.

QUESTIONER: Okay. And just also to clarify on the debt operations as the IMF has put it. The IMF in any program would already be assuming a certain amount would come from creditors as part of the 40 billion as indicated by both Madam Lagarde and the staff level statement. How can the IMF assume a certain amount is from creditors without having spoken to creditors?

MR. RICE: We dealt with this before you came but maybe I can just shortly summarize and say again what we assumed was the overall financing package which we are confident will come together. That will come together from various sources; from the IMF, from bilateral sources, from multilateral sources and then, the Ukrainian authorities have announced already that they are prepared to, ready to engage with their creditors to deal with some of the debt issues

So the package is going to come together from those various sources. What we don't have, what I don't have you for today, is a specific correlation between each source and a number. But that will come together in time.

QUESTIONER: Maybe just a follow-up on that. Say among those three sources you mentioned, bilateral, IMF and Ukraine's conversations about debt sustainability --

MR. RICE: Bilateral, multilateral, IMF --

QUESTIONER: -- yeah, exactly. World Bank, that kind of thing. If one of those does not produce what you expected but the program already goes to the board, what happens? I mean, do you expect, you know, say if Ukraine doesn't have enough to fill the gap, does -- is the IMF going to add more money later on or I mean, because there's still so much -- so many moving pieces and it just seems very unlikely that they're all going to be definitely set by the end of the month.

MR. RICE: Well, that's right and I think in particular the Ukrainian government's negotiations, discussions with creditors would not be complete by then. Because as I mentioned to Andre, I think what we need by the time of the board meeting is a meaningful sense that the financing package is coming together in the right direction.

That doesn't mean that all the Ts will be crossed and the Is dotted with every detail but I think we need meaningful progress towards that by the time of the board meeting.

I am going to move on because we've been on Greece and on Ukraine for a while. And I'm going to take a few questions online and then, I'll come back in the room briefly.

There is a question about Portugal which has proposed to repay an advance part of the IMF loan. How does the IMF see this decision and what is the signal that Portugal is giving to the markets?

Well, the backdrop -- this is, by the way, from Sikh Television in Portugal, Luis Manso. The backdrop to this question is that the Portuguese government has announced that it intends to repay up to 14 billion euros or 50 percent of the credit outstanding to the IMF over the next 30 months. And on Monday, the Euro Group lent its support and principle to this development.

You know, we think -- our view is that the authority's plans to repay this IMF credit are sound. Portugal may be able to save up to the total of 500 million euros during 2015 to 2018 in interest payments as it replaces the Fund credit with less expensive market financing. So again, we think it's a sound development.

There is a question about Yemen which is from Mahmoud Hassan Yota in Yemen, sorry, it's actually in Saudi Arabia. And is asking how does the IMF view the economic situation in Yemen given the recent political developments and the fragile nature of the country?

To which I would say, you know, we are concerned about the political crisis and its effect on the economy and especially the poor. It's something that we are watching carefully. Probably too early to make a decision but it's something we are monitoring.

I'll take one more question online and then come back in the room. It's on Ghana and from Ghana, from George Wiafe. The Ghanaian government is hoping to secure an IMF program by April this year. Is this possible from the IMF's view? And how much funding is Ghana likely to get under the IMF program?

I don't have a time on securing the program nor do I have the funding but what I can say is that the IMF team plans to be in Ghana from today, February 19 until the 26 with the objective of finalizing discussions with the authorities in several areas including the best policy response to the recent decline in oil prices and other issues related to the economy.

We expect to be finalizing the details of the program at the end of this mission. And then, it will be proposed to the IMF's board as expeditiously as possible. So the mission is 19 to 26 and then, we would hope to move to the board fairly soon after that.

Let me take a couple of more questions and then I'm going to wrap.

QUESTIONER: Ms. Lagarde met with the Greek finance minister and she has expressed her, publicly, the view that we should help our Greek friends. Well, could you provide a readout of this phone call or maybe tell us a little bit more about how this help from the IMF side could be directed towards the Greeks in this phase of the negotiations which is quite critical?

MR. RICE: Number one, they actually met face-to-face not just a telephone.

QUESTIONER: Okay but we had some phone calls yesterday…

MR. RICE: They actually met in Brussels and it was a very useful get-to-know-each-other meeting. I don't have the details of what they discussed. I don't believe they got into specific policy proposals.

Our position remains that of course, as in the past, we want to continue to support the Greek government in any way that we can going forward. And that's absolutely our position.

QUESTIONER: Does this entail the discussions about the debt structuring? Would the IMF be willing to discuss that and help Greece on that aspect of the negotiations?

MR. RICE: The overall situation is what is being discussed now with the European partners and Greece and the IMF in the context of the Eurogroup. What I was clarifying earlier was this distinction, which many people actually are a little bit confused about: the extension of the program that is being discussed is the European program which expires at the end of February. The IMF program, as I think you know, goes on until March 2016. So there's no discussion of extension of that program at this point. That program is there at the moment and subject to further discussion and the next review within which I think all of these issues would be discussed.

MR. RICE: I'm going to take last set of questions from you and then I'm going to wrap.

QUESTIONER: I know it's hypothetical, but…

MR. RICE: So you'll know the answer.

QUESTIONER: I know the answer but we don't want to make a mistake. That's why I'm asking this question. And you told us many times that your program is there until March of 2016. But if the Europeans accept the proposal by the Greeks, what is going to happen to your program? Because if they accept the proposal, the proposal is saying give us money no measures, and your program is money with measures. So as I understand, your program stays as it is, correct?

MR. RICE: As you said it's a hypothetical so I'm not going to get into too much detail. But talking about IMF programs, and not just the Greek program but IMF programs, there's always flexibility within IMF programs. You've seen this. You've been watching the Greek programs over the years. You've seen the program evolve, change, adapt as it should in line with changing circumstances and conditions. That's why we have these quarterly reviews under the program where we take stock working with the authorities. Again, this is standard, not just Greece. This is a standard operating procedure for the Fund. To try and be as flexible as possible, to serve the best needs of our member countries.

So the flexibility is something that's always there to be discussed. But it needs to be discussed on the basis of specific data, details, policy proposals and we're not at that stage yet.

QUESTIONER: (Inaudible).

MR. RICE: About?


MR. RICE: Yeah, I'm not sure I have anything for you on Serbia.

QUESTIONER: Well, Serbia has said that the IMF board is supposed to review their loan program on February 23rd but it also failed to sell its steel mill. So I'm wondering if that could pose a problem as that as one of the conditions?

MR. RICE: I'm going to respect your question and come back to you after the briefing.


MR. RICE: Okay? Good. And I'm going to call it a day. Thank you very much. Thanks, everybody.


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