–Welcome Fed Measures, Appropriate for Conditions at this Juncture

By Heather Scott

WASHINGTON (MNI) – A mission of the International Monetary Fund has
begun work with Greece on a new aid program, but it is too early in the
process to provide any details, an IMF spokesman said Thursday.

“A mission has just started working in Athens to begin discussions
on new arrangement at the request of the authorities,” IMF spokesman
David Hawley told reporters in the regular biweekly press briefing.

However, he noted it was “very early days” in the discussion, so he
had no comment on particular measures that might be included.

The comments come as talks continue on a Greek debt restructuring
agreement, hinging on a deal with private creditors, known by the
shorthand PSI.

Questions on Greece prompted a bizarre standoff with reporters at
the briefing, as Hawley declined to clarify a statement the IMF issued
Wednesday, on whether the IMF considers the European Central Bank to be
a public creditor or if it falls in some other category.

IMF spokesman William Murray said in a statement Wednesday, “To
ensure debt sustainability for Greece, it is essential that a new
program be supported by a combination of private sector involvement and
official sector support that will bring debt to 120 percent of GDP by
2020. The Fund has no view on the relative contribution of private
sector involvement and official sector support in achieving this target.
In line with this view, the IMF has not asked the ECB to play any
specific role.”

Asked in Thursday’s briefing to clarify the definitions in the
statement, Hawley refused. “I will not parse the statement further”
because it “speaks for itself.”

Speaking a day after the Federal Reserve indicated the key policy
interest rate will near zero at least through late 2014, 18 months
longer than previously, Hawley said the IMF welcomes the Fed measures
which are “appropriate for monetary and economic conditions in the U.S.
at this juncture.”

The IMF’s quarterly update of its World Economic Outlook released
Tuesday again stressed that central banks in advanced economies will
have to be prepared to ease further given the fragility of the recovery.

** Market News International Washington Bureau: 202-371-2121 **

[TOPICS: M$U$$$,MGU$$$,M$$CR$,MI$$$$,M$X$$$,MMUFE$,M$Y$$$]