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QUESTIONER: Bill, can you tell us what the red lines are for the IMF? And which one of the European proposals you accept and which ones you are turning down? As I understand it, the Europeans gave some proposals to the IMF for the sustainability of the Greek debt.
MR. MURRAY: Yes. We’ve been serving as a technical advisor to the Europeans for some time on debt
sustainability, so we have had ongoing dialogue with our European partners. I can’t really getinto those sorts of details. Good questions, but I really am not prepared to go there. Let me just underline what it is that we want to see.
As we’ve been clear this week in saying, we want a real fix, not a short-term fix.A quick fix isn’t going to work right now. Critical to us is Greece’s debt sustainability. That means that by 2020 we want to see Greece’s debt at 120 percent of its gross domestic product. That’s where it stands.
QUESTIONER: So as I understand, the main issue for the IMF is the sustainability, correct? What
are you going to do if the debt, the Greek debt, is not sustainable? Are you staying? Are you leaving the program? What is the next step?
MR. MURRAY: We’ve just made clear that it’s in Greece’s interest, it’s in Europe’s interest, and the world’s interest that Greece has a sustainable debt position. That’s the message that we have right now for our audience.
QUESTIONER: I wanted to know: are you calling for the Europeans to do what it takes to reduce the Greek debt, maybe lower its interest rate? According to you, what do Europeans have to do to reduce the Greek debt?
MR. MURRAY: Okay, thanks for your question. I’m not going to be prescriptive at this stage. There are a host of options that are possible. I remind you that the IMF has done what it needs to do in the context of its framework. We’ve extended maturities on Greek debt. It’s now a four-year facility rather than a three-year facility. It’s lower interest rate. So that’s the IMF contribution and clearly there has to be other actions taken to make sure that we reach a sustainable debt position in Greece.
QUESTIONER: So any action must be taken by the Europeans?
MR. MURRAY: Presumably, that’s who has to take the action.
QUESTIONER: Elaborating on that point, you would not sign off on a program that you believe is not sustainable for Greece’s debt, is that correct?
MR. MURRAY: We are stressing the need for debt sustainability in Greece.
QUESTIONER: So in the end, I mean, you could walk away. What are the rules governing that?
MR. MURRAY: We remain fully engaged with Greece. I am really not aware of any thought to not remain engaged with Greece, so the question is intriguing but I don’t think there’s much to talk about in that context.
QUESTIONER: I’m sorry, but could you elaborate on what do you exactly mean by “debt sustainability,” and why this difference between 2020 and 2022 is so important?
MR. MURRAY: Well, once we complete the review of the Greek program you’ll see a full debt analysis from the Fund. That’s a standard practice in the context of our staff reports. Those have been published in the context of Greece, so I’m not going to get into the nuances and the mechanics of how we come up with our estimate, but our basic finding is that to fix Greece, to get Greece back on a path of growth and job creation-ultimately, it’s not all about fiscal policy, it’s about getting back to growth and job creation and to get there you have to lower its debt-to-GDP ratio in a significant way and you’ve got to assure that it’s around 120 percent of GDP by 2020.
QUESTIONER: To understand it, the IMF is not accepting any change on the goal. The goal still is 120 percent to 2020, correct?
MR. MURRAY: Our view is that for debt sustainability, Greece should get to 120 percent by 2020, yes.
QUESTIONER: Yes, I want to follow up on Greece. Greece has been bailed out since 2010, and the GDP during the third quarter of this year got worse. Do you think that the program really works in Greece? Do you see it as a kind of failure for IMF?
MR. MURRAY: I think everybody has the best interests of Greece in mind and we’re just continuing to work to do whatever we can to get Greece back to the path of sustainable growth and job creation. Beyond that it may be an historical question, but we’re doing, and I think everybody’s doing their best to try and get Greece back on track.
QUESTIONER: It doesn’t seem to be working, does it?
MR. MURRAY: It’s not easy, it’s a very complicated task that everyone faces right now.
I have another Greek question here: IMF has various loan instruments for low-income countries to borrow on concessional terms that carry zero interest rates. How can those concessional loans be applied to Greece?
MR. MURRAY: This is a legitimate question. I can understand why it’s being asked. Just let me clarify this. Again, what have we done with Greece? Number one, we’ve extended maturities to four years. We’ve lowered the interest rate on those loans as a result of shifting to the extended Fund facility. That is what we can do in the context of our framework, our IMF framework for Greece.
Concessional loans are a different story. One of the principal tests that are applied to concessional loans is income levels. And Greece is inherently a wealthy country, particularly relative to the nations, the member countries that qualify for our concessional zero interest loans. So long answer is Greece would not qualify for concessional lending. Πηγ
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Το Loutraki One σέβεται όλες τις απόψεις, αλλά προτιμά τα Eλληνικά και όχι τα greeklish, το χιούμορ και όχι τις ύβρεις.
Επειδή το Loutraki One πιστεύει στη δύναμη του διαλόγου, αλλά όχι στην εμπαθή και στείρα αντιπαράθεση μόνο για το θεαθήναι, διατηρεί το δικαίωμά του να μην αναρτά σχόλια που είναι υπέρ το δέον υβριστικά ή άσχετα με το άρθρο, που αναφέρονται σε προσωπικά δεδομένα τoυ αρθρογράφoυ ή που δεν περιέχουν το e-mail του αποστολέα. Tο email των αποστολέων σχολίων δεν εμφανίζεται δημόσια.