Sunday, June 5, 2016

Debt relief is firmly on the agenda now. Debt relief, we have agreed would be contingent on Greece meeting targets during its three economic programs with Europe, and that it should be fully delivered by the end of the program period. We are not yet in a position where we can say the IMF is ready to go ahead with a Fund financed program, but we are hopeful that we will get to that point by the end of the year. .. IMF

Transcript of a Press Briefing with William Murray, Deputy Spokesman, Communications Department Washington, D.C. June 2, 2016

QUESTIONER: Can you please give us a timetable of your next moves on Greece? I mean how you plan to deal with the Greek issue until the end of the year when as Poul Thomsen said, he might go to the Board?

MR. MURRAY: Okay, thanks. Let me preface my remarks on Greece to say I really don't have anything fresh since you were briefed last week following the Eurogroup meeting. I mean it's really -- things are where they stand, so I don't have a specific timeline to offer at the moment beyond what we indicated last week was a possible timeline. Just want to make these points though, we remain fully and actively engaged with our European partners and with Greece, and I just want to remind you of basically the following points, and this is what we mentioned last week following the Eurogroup meeting in Brussels. Debt relief is firmly on the agenda now. Debt relief, we have agreed would be contingent on Greece meeting targets during its three economic programs with Europe, and that it should be fully delivered by the end of the program period. We are not yet in a position where we can say the IMF is ready to go ahead with a Fund financed program, but we are hopeful that we will get to that point by the end of the year. Bottom line overall, significant progress has been made.

QUESTIONER: As an IMF official mentioned one week ago the debt measures will be finally approved with the last review. I mean that's in the best case scenario but it means in two years from now. Are you satisfied with that?

MR. MURRAY: You know, as I mentioned, debt relief is firmly on the agenda and that we agreed that it would be contingent on Greece meeting targets during its three-year program with Europe and that it would be delivered by the end of the program. So that's where we stand.

QUESTIONER: (inaudible). On the details of the debt relief, the German Finance Minister said basically that the debt relief proposal of the IMF could fuel populist movements in the sense that it could undermine the trust that the population in Europe have placed in their governments because basically it would mean that maybe the Greek debt will never be repaid. How do you react to that and what does it say about the gap that still exists between the IMF and Germany on the debt relief proposals?

MR. MURRAY: Yeah, I don't have anything specific on that. I'm not fully versed in what that comment may imply or might have been. You know, our bottom line is we published a DSA, we're going to update that, you know that. We will update that at some point this year. But our debt sustainability analysis has been pretty clear on what we think about the sustainability of Greece's debt and that it does need significant debt relief in some fashion. What form that takes, how it's structured, all those things remain to be determined. That's really between the Greek government and its European partners. That's things that are being worked at as we speak. Beyond that I can't really say. We're fully engaged, we're keeping an eye on the situation, we're actively involved, but beyond that I can't really comment on implications of things that aren't settled yet.

QUESTIONER: Just to follow up -- sorry -- but are you at least concerned about the fact that Germany is still really far from your position on the debt relief?

MR. MURRAY: I don't have a sense of that. Like I said, debt relief is firmly on the agenda now and that means on the agenda of everyone.

QUESTIONER: Are you confident that the debt measures that the debt measures of the Europeans will eventually come up with -- will actually be consistent with what you've believe is needed for debt sustainability? That's a most important issue.

MR. MURRAY: I can't really comment on this. You're asking me to speculate about an end product, but the end product should be Greece is in a sustainable position. So we're confident that's where we'll end up.

QUESTIONER: (Inaudible) do have to ask that.


QUESTIONER: Do you want to address this report that Mr. Thomsen was against the agreement and Mrs. Lagarde in favor of the agreement? Are they on the same boat on the Greek program? Because according to some colleagues on Brussels, Mr. Thomsen was furious after the Eurogroup meeting.

MR. MURRAY: I'm not aware of anything on that. I can't help you out. [On June 27 the IMF had issued this press line in response to a similar Reuters query: “The suggestion of ‘overruling’ is nonsense. The parameters of our negotiation positions are, as always, discussed and agreed in advance. Of course, Poul [Thomsen] consulted with the Managing Director before reaching final agreement with the Eurogroup--as is typical in such cases. The Managing Director fully backed Poul’s position.”]

Let's not do too much on Greece because as I said we don't really have anything fresh today to offer you beyond what we said last week following the Eurogroup. I'll give one more -- please -- two more Greek questions? Okay. Let's go with the lady here and then we'll go to you, sir. Thank you.

QUESTIONER: I do have two questions actually. So one is the exceptional access that Greece is under at the moment is projected to fall below that line with the period up to the end of the year. So would you expect that the Greek program in order for you to sign off to that might not need -- if you don't need the exception access debt restructuring at all? Could you envision such a scenario?

That's one question.

MR. MURRAY: Okay. You want to hit me with the other question or do you want me to take that one first? Okay, I'll take this one first.

You're correct that the current trajectory will get it below the threshold. You mentioned beyond that, I don't really have anything. I can't give you any steer on what that will mean by year end. What we said last week, just to remind what I just said, is that if everything falls into place we could be in a position to have a Fund program brought to the Board by the end of the year, but beyond that -- that's the only end of year feature I can touch on right now.

Second question, sure.

QUESTIONER: As far as I understand the IMF at the Eurogroup signed off basically to the completion of the review based on what the Greek authorities had brought to the table and promised to do, but not on the debt relief. So basically that the Europeans were proposing. So is it true, is it correct kind of get from that that no further measures are needed from the Greek side and nothing more is needed by the IMF that is not currently at the Eurogroup agreed in order for this review to be completed?

MR. MURRAY: I really -- that's -- no, I think right now what we're working on is the European partners and Greece is working on its program, finalizing the details of its program. So until that's done you really should talk to the Europeans, I mean first of all about the nitty gritty of the program that they're working on. I don't have blow-by-blow on that. It's really up the Europeans to elaborate on where things stand.

Once we get through that process that gives you part of the calculus and will help determine our relationship, the Fund's specific relationship with the Greeks going forward. But we have to get through this process right now, which is really pretty much European focused. Beyond that I can't elaborate.

The gentleman in the back.

QUESTIONER: We learned a couple of months ago that Greece is the big receiver of technical support of the IMF and especially regarding tax collecting. So what did we learn from your report a couple of weeks ago, that there hasn't been any progress in tax collecting in Greece. What went wrong? That's the first question.

The second question is I'm looking at the interview Obstfeld gave and there is one sentence that crossed my mind, like curiosity, and it says, and I quote, "Of course there are limits" -- it's regarding austerity -- "Of course there are limits to the pain economies can or should sustain. So in special difficult cases we recommend debt re-profiling. And that is an approach we are currently recommending Greece." Does that mean that poor people in Greece are worse off than a lot of other poor people in countries with higher debt problems?

MR. MURRAY: Okay. Your first -- this is the interview in which newspaper? It's a German newspaper, correct? Is that –

QUESTIONER: No, the one where he gave to –

MR. MURRAY: I just want it for the record just so everybody knows which interview we're talking about.

QUESTIONER: What you are spreading today.

MR. MURRAY: Oh, you're talking about the IMF survey interview today?

QUESTIONER: Survey, yes.

MR. MURRAY: Okay. Sorry. Let me step back a second on that. Thank you very much. For viewers, we are releasing today a brief IMF survey. It's going to be released publicly at 10:30 a.m. our time, 14:30 GMT.

So I really am not going to try to elaborate upon what our Chief Economist states in this interview. I mean, look, we can get back to you with more detail, but I'm not prepared to give you comparatives between Greece and other countries and the state of poor in the various European countries. I'm sorry I'm not prepared to offer you a comment on that.

Remind me of your first question.

QUESTIONER: Tax collection.

MR. MURRAY: Tax collection, yeah. I'm going to have to look at the TA reports, but tax collection technical assistance is something that we do worldwide, so it's not just in Greece. That's one of the things we specialize in, working with taxing authorities and revenue authorities in our member countries and how to improve their systems and their tax collection mechanisms. It's not the policy, it's the actual physical way they collect taxes, how they collect them and how they are made more efficient in terms of their tax collection. So our TA is not a reflection -- you can't connect our TA with the quality of tax revenues just yet in Greece. It's a building block process, it's underway. Beyond that I really don't have anything to offer you on the quality of tax collection in Greece. There's a lot of challenges. We've been clear on that since we engaged in a formal program relationship with the Greek authorities. We don't have a program right now, but TA is something that we have with non-program countries as well and something -- the fact that they're seeking technical assistance from us is indicative of their hope to improve tax collection. So I think it's positive that they're engaged with us in that respect.

I think that's all I can get into on Greece at the moment.

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