Partial Transcript of an IMF Press Conference on Europe
Washington, D.C.
April 11, 2014
April 11, 2014
Reza Moghadam, Director, European Department
Phil Gerson, Deputy Director, European Department
Aasim Husain, Deputy Director, European Department
Ranjit Teja, Deputy Director, European Department
Mahmood Pradhan, Deputy Director, European Department
Ángela Gaviria, Senior Communications Officer
Phil Gerson, Deputy Director, European Department
Aasim Husain, Deputy Director, European Department
Ranjit Teja, Deputy Director, European Department
Mahmood Pradhan, Deputy Director, European Department
Ángela Gaviria, Senior Communications Officer
"QUESTION: The fact that Greece went to the financial markets contradicts your previous estimation that the debt is not sustainable and needs restructuring.
MR. MOGHADAM: Is this a question?
QUESTION: This is a question.
MR. MOGHADAM: Okay. I think it is positive that Greece is able to tap the financial markets, but I would say that when it comes to the question of sustainability, they are able to tap financial markets for a number of reasons. The most important is that Greece has implemented very important, very difficult reforms to stabilize its economy. The fiscal adjustment in Greece in view of extremely high debt--the highest in the euro zone--has been impressive adjustment. Turning to labor and product market adjustments, in the review that is being completed, there is a very impressive list of structural adjustments on the product market side. So it is a testimony to successful implementation despite difficulty, despite delays. First, I think it is that.
Secondly, I would say that they are able to tap the markets because there was a framework agreed in November 2012 to ensure that debt remains under control and is sustainable. The European countries and Greece have made commitments. Greece has made a commitment to fulfill its obligations on the fiscal side and structural side and reform, and the European countries have made a commitment to make sure that the debt level does not rise above a certain level. So because of those Greece can access the markets.
Finally, I would say that financing needs remain very large, the debt remains very high, and these issues will continue to be addressed, and need to be addressed, by Europe and the Fund in the context of future reviews, because the financing needs for the next two years will be quite large, much larger than the amounts that are currently being raised by the markets. So there will be a continued need for support and looking at the framework".
