Main results
Video highlights, Eurogroup meeting of 7 April 2017
Greece
The Eurogroup was briefed on developments in the intense talks between the European Commission, the European Central Bank, the International Monetary Fund and the European Stability Mechanism and the Greek government over the past month.
The institutions and the Greek authorities reached an agreement on the main elements of the policy reforms required to move ahead with the second review of the current macroeconomic adjustment programme, which is necessary to unlock further financial assistance to Greece. This agreement refers to the size, timing and sequencing of the reforms.
The institutions will continue technical work in Athens as soon as possible to swiftly conclude a staff level agreement.
The institutions will continue technical work in Athens as soon as possible to swiftly conclude a staff level agreement.
- Timeline: the third economic adjustment programme for Greece
Thematic discussion on growth and jobs: investment
The Eurogroup continued its discussion on promoting investment, which it started in July last year, and adopted a statement setting out common principles to guide national policies in this area.The principles concern improvement of the business environment, increasing the efficiency of public administration, prioritising high-quality public investment to boost growth and potential growth, developing market-based sources of business financing and removing regulatory barriers to private investment.Banking union: euro area aspects
The Chair of the European Central Bank's Supervisory Board, Danièle Nouy, presented the ECB annual report on supervisory activities in 2016.The Board's priorities for 2017 include further convergence of national supervisory standards in the banking union, addressing the non-performing loans on banks' balance sheets, which remain problematic in some member states, and improving the profitability of banks and thus their ability to finance the economy.The Chair of the Single Resolution Board (SRB), Elke König, informed the Eurogroup of the SRB's activities. She reported on the progress achieved in resolution planning and on banks' contributions to the single resolution fund.Cyprus : post-programme surveillance
The institutions participating in the post-programme review and Cyprus' Minister for Finance Harris Georgiades briefly reported on the outcome of the recent post-programme surveillance mission to Cyprus.They reassured the ministers that the Cypriot authorities remain committed to continuing sound economic policies. They also confirmed that there was no risk of non-repayment of the loans Cyprus had received from the European Stability Mechanism in the context of its macroeconomic adjustment programme of 2013-2016.
| 7/4/2017 | STATEMENTS AND REMARKS |
Remarks by J.Dijsselbloem following the Eurogroup meeting of 7 April 2017 | |
Good afternoon and welcome to this press conference, here after the Eurogroup in Valletta. I want, first of all, to thank the Maltese hosts for the excellent organisation and the wonderful venue for today's discussions. Today in the Eurogroup, we welcomed Danièle Nouy of the ECB Supervisory Board and Elke Koenig of the Single Resolution Board. They joined us to speak about their work, as they do on a regular basis.
Let me start with Greece. We have achieved significant progress on the second review since the last Eurogroup in March. As you remember, then, on my initiative, we had changed the strategy, we had changed the order of things and we had intensified talks to, first of all, reach an agreement between the institutions and the Greek government on the key elements, the overarching elements, of the policy package, let's say the big reforms, and once that was achieved, to finalise details and solve the remaining smaller issues. We have been successful in doing so. So that is the news I can bring you today. We have an agreement on those overarching elements of policy, in terms of size, timing and sequencing of the reforms, and on that basis, further work will continue in the coming days, with a view for the mission to return as soon as possible to Athens to complete the work.
Let me give you some headlines. We have agreed on a 2% reform package, 1% in 2019 mainly based on pensions, 1% in 2020 in principle, mainly based on personal income tax. And we agreed that the Greek government can also, in parallel, legislate expansionary measures, on the assumption that the economy is doing better and the fiscal path is doing better than expected, and using the fiscal space that then will be created by these additional reforms.
We invite the institutions and the Greek authorities to continue the work putting the last dots on the "i's" and to reach a full Staff Level Agreement as soon as possible.
Once a Staff Level Agreement is reached, the Eurogroup will come back to the issue of the medium-term fiscal path for the post-programme period and debt sustainability, building on what we have already agreed in May 2016, in order to reach that overall political agreement. And it is very important for Greece that we do this as soon as possible. But, as we said, the big blocks have now been sorted out and that should allow us to speed up and go for the final stretch.
Moving on to the banking sector. Danièle Nouy and Elke Koenig gave a timely update on recent developments in the financial sector, as well as on the key challenges and priorities that both institutions have in the coming months.
We welcomed the news that the banking sector in the Eurozone, or should I say in the banking union, is in a better shape. But, of course, some important legacy issues still remain; are being addressed; have been clearly identified and we will take the necessary decisive actions within the banking union framework. Overall, we commended them for the excellent work done by these still relatively new institutions and encouraged both them and the Commission to continue to work closely together. Looking forward to our next debrief by them in the autumn.
Third, we held one of our regular thematic discussions on growth and jobs, today on supporting investment in the euro-area. Investment in the euro-area is running still at lower levels than before the crisis, particularly in some member states. Addressing barriers to investment is therefore a clear priority for euro-area member states and the euro-area as a whole. If we address these weaknesses, we can also work on the convergence of member states' economies, and that element of convergence should be our top priority in economic terms.
We started this work with a first exchange of views in July 2016 and followed it up in February, with a discussion on ease of doing business, particularly looking at public administration and sector-specific bottlenecks.
Today, we were able to build on that previous work and agreed on three common principles. These cover, in general terms: first of all, promoting private investment; secondly, prioritising productivity-enhancing public investment; and third, developing market-based sources of finance, broadening the sources of finance throughout the Eurozone. A document has been prepared by the Commission and will be published. Our common principles and statement has been drawn up by the Eurogroup. Our common principles will help us to focus on these reforms, we will exchange best practices, the Commission will monitor these topics for us, allowing the Eurogroup to regularly take stock of the progress that is made.
Finally, the institutions briefed us on their post-programme surveillance of Cyprus, one year after the end of the programme. There is very good news on the economic recovery which, together with progress in previous years in fiscal consolidation, has led to a strong primary surplus. If we go back to the debt of the Cypriot crisis, you will remember that there was a contraction of, I believe, minus 6%. There is now a growth rate in Cyprus of, I believe, 3% or maybe even over 3%. Our Greek colleague commemorated that before the crisis of course, the Cyprus was also at high growth figures, but then it was based on over expenditure on the public side and over-crediting in the banking sector. Now, it is solid growth and not based on risky economic developments. So, very strong and very good performance in Cyprus, on which, of course, we complimented the Cypriot authorities. The Cypriot government also reconfirmed its commitment to the reform effort. The time that they still have will be used to the max to work further on dealing with some of the remaining vulnerabilities in Cyprus, as in the financial sector, NPLs and any budgetary challenges. So that was a good news to end with.
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