IMF FINANCIAL SUPPORT TO UKRAINE
QUESTIONER: On Ukraine, can you give us an understanding about the potential bank recapitalization needs, and where will the money for those potential needs come from?
MR. MURRAY: I'm really not able, at the moment, to go beyond what we brief on in Kiev. We just wrapped up a press conference a couple hours ago in Kiev, where we announced to have reached staff-level agreement with Ukraine. There's a fairly detailed press release. We have a staff-level agreement, still subject to approval by our management and the executive board. There's a $27 billion package. The IMF will contribute somewhere between $14-$18 billion towards that package. The reason we're giving a range is because we're still working on lining up bilateral and multilateral contributions to the overall $27 billion.
QUESTIONER: There was no mention of a debt-restructuring. So, to be clear, there's not going to be a need for debt-restructuring at this point in the program?
MR. MURRAY: We don't proceed with programs if they're deemed to be unsustainable. So, the fact that we're proceeding with the program indicates that we don't envisage, at this point, a debt-restructuring. But, you know, let's wait for the staff report to be published so we can get into more detail on that.
QUESTIONER: Staying with Ukraine -- and I also apologize that I'm not familiar with the contents of the press conference in Kiev --I understand that the rules of the IMF also precludes it from lending to a country into arrears. That is, a country needs to be current in their debt payments? Basically, does it mean that if and when the first disbursement comes, it will probably go into paying debts?
MR. MURRAY: I can't answer that question right now. I have to see the full program. But that's an assumption you're making. I can't jump to that conclusion. The program is to assist Ukraine. There's conditions attached to how they use the money -- but we'll see what happens.
QUESTIONER: I understand there is a financing need.
MR. MURRAY: So it's a balance of payments support program.
QUESTIONER: Do you know the amount of the need for the nearest future?
MR. MURRAY: Well, like I said, it's a $27 billion package, over two years, somewhere between $14 and $18 billion dollars. That's about as far as I can go right now, in terms of context.
QUESTIONER: My question is mostly about timetable. We've got the staff-level agreement, it has to go to management. When will that happen? Then, I gather, from the time that management accepts it, it has to be two weeks before it goes to the Executive Board. Will this get decided before the spring meeting or after? Because I gather you can't do any decision during the spring meeting. And the third part is whether this will be released after Ukrainian elections or before?
MR. MURRAY: There's no hard rule in terms of timeline. So the fact that we issued a press release today doesn't start a specific calendar. We hope at wrap everything up sometime in April. I can't be any more precise about that right now.
What are the outstanding issues? Well, I already mentioned one: finalizing the bilateral, multilateral components of this $27 billion financing package. There are a number of prior actions that the Ukrainian officials have to implement. That means going to their parliament. I believe there was interaction with the Ukrainian parliament today on the program.
So, there's a process underway in Kiev itself that has to fall into place to facilitate, action and discussion by our executive board. I can't rule in or rule out the timeline you described.
QUESTIONER: Will money be released in April?
MR. MURRAY: Assuming the IMF Executive Board approves what's brought to them, there is typically an immediate disbursement. It could be April.
QUESTIONER: Would you say that it is risky for the IMF to get involved in Ukraine, given the very poor track record of the country with the institution?
MR. MURRAY: We've been in discussions with Ukraine for two years, essentially two years. We have a lot of experience in Kiev. The program is proceeding because of the fact that the authorities have voiced commitment. We've consulted widely in Ukraine, across the political spectrum. So we're confident that they're going to move forward. We wouldn't be bringing the program forward if we weren't confident.
QUESTIONER: But there were two previous programs who went off track since 2008.
MR. MURRAY: We bring a program forward, we work on implementation, and that's where we're at right now. We're confident that this program can move forward.
QUESTIONER: So is it not risky for the IMF to get involved?
MR. MURRAY: We're pretty confident that this program can move forward. The Ukraine authorities have voiced, publicly and privately, a keen interest in getting their economic house in order.
QUESTIONER: That was essentially my question. Do you view the Ukrainian authorities as committed to reforms? But, just as a follow-up on something asked earlier, are you able to share at all anything about what kind of loan tranche Ukraine would get when the program is first approved? Because they do have a lot of financing needs coming up by June, and after that, maybe it would be less urgent. So, do you think it could be a bigger chunk of money right at the beginning?
MR. MURRAY: I can't get into details about tranching at this stage, because we've got to finalize that bilateral-multilateral component. But, they have balance of payments needs. But, I can't get into that detail now.
