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ENP Newswire -
Release date- 27022014 - Webcast of the press briefing Webcast.
Beginning with management travel, I can tell you that next
We expect to publish the Managing Director's speech which is scheduled for around 10:30,
Our First Deputy Managing Director,
Our Deputy Managing Director,
Also on Friday, our other Deputy Managing Director,
That's about it for the housekeeping, except as usual, at this time to say that latest addition of 'Finance and Development' is issued today. It's focus is on
Now, I want to depart a little bit from our usual practice at these press briefings because just a short time ago, some minutes ago, the Managing Director of the Fund,
So I want to begin just by reading verbatim the short statement that was just issued. Then we will return to our usual embargoed press briefing until 10:30. Obviously this is not under embargo because it's been released. I apologize to those in the room, once again, that this came so late, and I know that was inconvenient for you, but it was important that we got this statement out as soon as we can and that's what we did.
So let me read to you this statement from
'The Ukrainian authorities informed me today of their request for support from the IMF. We are ready to respond and in the coming days will send an IMF fact finding team to
'We are also discussing with all our international partners bilateral and multilateral how best to help
That's the statement from
With that I will turn to some questions in the room and to some questions online. Given that we're on-so we're turning back to embargo mode. Given that we're on
QUESTIONER: Please describe for us the instruments that IMF has for helping
On the timing, the IMF can move very quickly. It's one of the features of the
Again, so much depends on what the team finds once they are able to get on the ground, and, make an independent assessment. What really matters for us in these situations, of course, is that once the program is designed and in place that, it's implementable; that the capacity is there, and the commitment and the ownership is there to implement the program.
So there are a number of factors in play that would affect the timing. But I think as
QUESTIONER: Let me follow-up for a second. The reason I asked was because the regular programs, as we all know, take months to negotiate, in a best case scenario. The rapid financing mechanism is okay, but it's very limited in terms of the availability of funds. It's limited by the quota size, and the Ukrainian quota is around
QUESTIONER: I would like to ask how flexible you can be this time in comparison to the previous program that didn't work with
What you're referring to is the Article IV that was done several months ago. Broadly we would expect that the main elements of that Article IV would remain valid. But again, the team needs to get on the ground and make a real-time assessment, given, as we all know, the developments that have taken place, even in that short timeframe.
QUESTIONER: (inaudible) complaining that the (inaudible) are too hard to fulfill. So I'm wondering if you have addressed now political will to be more flexible?
QUESTIONER: By accepting this request and moving forward, just to be absolutely clear, the IMF is officially recognizing the new government in
QUESTIONER: Just on a technical basis, can a country that owes the amount that
On the debt, we, again, need to go there with the fact-finding team. We need to update our overall assessment. Given these recent economic and political developments, as you know, for countries under IMF surveillance-a DSA as we call it, a Debt Sustainability Analysis-is an integral part of the work that we do.
This was the case for
QUESTIONER: Just to be clear though, I understand you're not wanting to talk about what instruments are applicable, but on a technical matter, just under IMF rules, I think the IMF can inform us whether it is legally possible for a country that owes as much as
QUESTIONER: Could you point us to the right way?
QUESTIONER: Given the high political pressure on the IMF coming from the U.S., notably, do you think that the IMF will be able to act in total independence, and to impose its own rules, like assessing the economic situation in
Of course, and as Madame Lagarde also
mentioned in her statement, we do that assessment in consultation, and discussion, and in dialogue with many others. She indicated that we're talking to all our partners including bilateral and multilateral groups.
QUESTIONER: Just to elaborate on that last point, when you talk about consultation with partners what does that involved? I mean, is it kind of saying what can other countries commit, and maybe that would influence how much money the IMF gives or do you also consider their assessments of the economic situation?
The Foreign Secretary of the
QUESTIONER: The follow-up question, as far as timing, I know you don't know how much this particular program can take, but you said the IMF can act very rapidly. What's the average or range of how long it could take because, especially in this case, you know, you already have done so much analysis on
But let me caution that each country is different. Each circumstance is its own. Just because we moved at a certain speed in one country does not necessarily mean we'll move at the same speed in another country or in this case of the
You're right that we did the Article IV, but as I mentioned in response to our colleagues question, there has been a lot happening, and there have been developments. These need to be taken into account by the team that's on the ground.
Maybe one other piece of information I can give you on the team that's on the ground. We expect it to be on the ground next week. I can tell you that the staff team will be led by
I can also tell you that the head of our
QUESTIONER: Just for a clarification. Did you decide that Ms. Lagarde is going to have discussions with the Russian Finance Minister or did those discussions already take place?
QUESTIONER: What time?
QUESTIONER: I was wondering if the
So again, just the process, the fact finding team goes, makes the assessment, and, if those discussions can form the basis of the program, then there would be a negotiation process. That's when we would get into financing parameters and so on.
All right. I'm going to take a few more, and I'm going to look online because there's a long list here. It's all on
QUESTIONER: So, Gerry, you said there were a number of factors in play that would affect timing. Can you elaborate on what specifically you're talking about?
You mentioned the broad-based reforms in the Article IV that the IMF has previously talked about. The IMF has also said that it would require tough preconditions. Is it correct to say that the IMF is not backing down from that stance about requiring tough preconditions, a shorter and durable-a shorter financing program?
Now, what those policy understandings will be, and understandings about reforms that need to be implemented, again, we've just announced the team going on the ground. I don't want to get ahead of them.
What goes into the time factor? Well, I don't think there's any mystery to it in the broad sense, but it obviously depends on how well the discussion go, what the nature of the issues are, what the nature of the required policy understandings are, and how fast we can make progress on those things, as well as the whole potential, a bit further down the road, the whole potential financing package and how that would work.
QUESTIONER: Sure, but just to be clear, the IMF has explicitly and clearly said in the weeks leading up to this event that because of its previous bailout history with the
QUESTIONER: A new Prime Minister has just been designated today, but there's still a lot of political instability in the country. How do you expect the new governments to get enough political support to implement what could be really a harsh reforms that you require?
QUESTIONER: What I want to know is does the IMF need the political situation to stabilize before it gets any kind of agreement on the financial assistance?
QUESTIONER: On this subject I just wanted to ask if you want to use the situation to prod your biggest shareholders to fulfill their own commitments. As we all know the Americans, for example, have not yet acted on the quota reform. So maybe this is a good time for you to make them move if they want the IMF to help out in this situation?
Okay. I'm going to see if there's anything new online. I see a lot of
Why won't the reforms the IMF is insisting on for
I do think I covered that point so I won't repeat it. I'm actually, you know, looking at the other questions. I don't see anything on
QUESTIONER: If I could modify my last question. Have you discussed this with the Board?
Again, I just think it's premature to get into these issues. The parameters of the program will be something for the team to look at when they're on the ground.
Okay. Let's change the subject. Good morning.
QUESTIONER: Good morning. I've got some questions from
Also, what are, according to IMF, the capital needs of the Greek banks? I'm asking that because the Financial Time showed twice that according to your estimations these needs will reach the amount of 20 billion.
We expect the visit to last a couple of weeks. Will it be the last mission? We hope so. Certainly our focus is on seeking agreement on the set of policies that would facilitate the conclusion of the fifth review. So that's our goal. We're working hard, very intensively with the authorities and the European partners in that regard.
What are the issues being discussed? The team is in discussion. I don't have the details, but a number of issues on the fiscal and the structural financial site that will need to be bridged before the staff level agreement could be reached.
We are particularly concerned about delays in some structural reforms, and focused on what should be done to catch up. I think that was the first part of your question.
On the second part of your question. Again, the financial sector will be part of the assessment and the discussion that the team is making on the ground and ongoing discussions with the Greek authorities on that so it wouldn't be appropriate for me to comment.
QUESTIONER: You don't want to comment on this article of the Financial Times?
QUESTIONER: Just to follow-up on that, part of the issue with the bank sector needs is how much capital adequacy requirements
I didn't mean to be cute with you, you know, we can't be in the business of commenting on press reports. The issue's being discussed on the ground, so on the substance of it I'm not going to go beyond it because the team's discussing it on the ground.
Okay. Are we still on
QUESTIONER: If I may. I would like to ask whether you would welcome a new loan agreement between
On the financing gap I think it's, again, it's premature to discuss the details of, you know, what would be required. It depends on a number of issues still under discussion. Including, for example, the assumptions around privatization.
But as you know, and this is not new, the European partners have said it a number of times that they will do what is required in terms of supporting
I see that I actually have a few questions on other topics and I'm going to take them. Then I'll come back briefly in the room and wrap up. But just so it's not completely just
There's a questions which asks as the IMF staff is in
What I'd say to that is the focus of the discussions, the team is on the ground, the focus of the discussions should remain centered on ensuring strong program implementation that's of the current program which is essential to secure economic growth and debt sustainability for
So at the proper time there will be a discussion on these other issues that Questioner is asking about, the precautionary credit line or clean exit. Maybe just to say that, if we look at
There's a questions on
What I would say on that is many of the economic measures mentioned in the Prime Minister's speech to Parliament earlier this week take forward the economic and structural reforms proposed in the IMF's discussions with
Just to try and respond to the question a bit more directly. High unemployment is obviously a pressing issue in
There's a second question on
On the new government we all listen very carefully to
On the new finance minister I would just like to say that he was very well-respected when he was a member of the IMF Executive Board.
I'm going to make this the last question.
QUESTIONER: Gerry, sorry to come back to the topic of the day. In terms of the IMF recognizing Ukrainian government, in the Egyptian situation it took several months before the IMF acknowledged it. Can you help us understand that process of how it has acknowledged the government here in
I assume then if the IMF is supporting this that it has
I am not just-speaking frankly with you, up to date on whether the Board has been briefed as of now. I am sure if the Board has not been briefed it will be in the process of being briefed.
QUESTIONER: Okay. Just a follow-up.
QUESTIONER: Sure, please.
QUESTIONER: Madame Lagarde has said here that we're discussing with our international partners the best way to help
I think that's completely separate from the issue of the IMF being able to make an independent, technical economic assessment of a member country's needs.
So I am going to leave it there. Thank you very much for your questions and for your patience at the beginning of this press conference. I look forward to seeing you in a couple of weeks. Thanks.
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