Reuters Insider - STREAM: Eurogroup news conference

SRM Energy

26/04/2014 18:04

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 Source:             Thomson Reuters                                   
                                                                       
 Description:        Members of the Eurogroup hold a news conference   
                     following their informal meeting in Athens.       
 
 
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Transcript (May be auto-generated)

 Ladies and gentlemen, if we could all sit down, close the doors, that would 
help. Okay, thanks very much. Welcome all. Let me debrief you on the outcome of 
the Eurogroup meeting we had this morning. I will start with Greece, which is 
not only our host today but was also our main topic today, say a few words on 
Portugal. We briefly were informed on the state of play in Ukraine. Olli will 
say more about that. We discussed the draft budgetary plan of Luxembourg. And 
finally, we took stock of the state of play on the Banking Union. On Greece, a 
statement has been distributed to you or will be distributed to you. Let me sum 
up the main points. We are of course pleased that the fourth review can now be 
drawn to a close. This has been an arduous process but we have now a positive 
outcome. The Greek government is implementing or committed to undertake in the 
near term important reforms that will enhance Greece's growth potential, create 
job opportunities and spur investments. This includes concrete measures to 
liberalize transport and rental markets, to open up closed professions, as well 
as far-reaching energy market reforms and an overhaul of the privatization 
process for public corporate and real estate assets. Subject to the 
implementation of these reforms, Greece will get EUR8.3 billion from the EFSF to
be disbursed in three tranches over the coming month, with a first tranche of 
EUR6.3 billion at the end of April that will allow Greece to meet its debt 
servicing obligations in May and to further disbursements of each EUR1 billion 
will take place in June and July on the fulfillment of- on the basis of 
fulfillment of six milestones per tranche. As I have said before, growth is the 
only way to get employment figures up and overcome the crisis in a sustainable 
manner. Therefore, we had a discussion on a comprehensive Greek growth strategy.
Horst Reichenbach who is leading the task force for Greece joined us in this 
discussion today. In this, we agreed that we will support Greece in its 
intention to develop a well-defined growth strategy, complementing the MoU. And 
this strategy should also be the basis to increase effectiveness in the 
allocation of funds from international financing institutions and the EU 
structural funds as well as the coordination of technical assistance. Of course,
we are still in the early stages of this discussion and we have asked the Greek 
government to define its growth strategy in the next weeks and months. On 
Portugal, we took stock of the state of play. The program remains very well on 
track. The economic recovery is strengthening, the stabilization of the 
financial sector is progressing and yields on sovereign debt have continued to 
tighten. The process for completing the 11th review mission is on-going and a 
decision on the disbursement of EUR1.2 billion is expected to be taken by the 
Euro Working Group on the 24th of April, once prior actions and national 
procedures are completed. Now there is still some time before the end of the 
program. As you know, it runs out on the 17th of May and still one review to go.
So we will come back to Portugal's exit strategy at our meeting in May which is 
in the 5th of May after the 12th and final review mission is concluded. As I 
said we were informed by the Commission and the IMF on the preparation of the 
program for the Ukraine. And Olli will to say more on that after I have spoken. 
On the draft budgetary plan of Luxembourg, as I have mentioned after last 
month's meeting, we will review over the coming months the updated draft 
budgetary plans of Member States that were still in process of forming a 
government when we discussed the other draft budget plans in November. Those 
three countries were Austria, Germany, and Luxembourg. So today, we have 
reviewed the updated draft budgetary plans of Luxembourg, which have been 
submitted on the 17th of March. On the basis of the Commission's assessment, 
which we endorsed, we were pleased to find that Luxembourg is now fully 
compliant with the rules of the Stability and Growth Pact. Just one remark to 
make there that Luxembourg's estimates of the growth are slightly more 
optimistic than the Commission's estimates for growth, so there is a reason to 
be a little careful there. We plan to discuss Germany's updated draft budget 
plans at our next meeting in May and as soon as possible also the Austrian draft
budgetary plans. Finally, from my side, a couple of remarks on the banking 
union. We briefly took stock of the state of play. 

As you know, an agreement was reached between the co-legislators on the SRM 
Regulation with the Parliament on the 20th of March. It was confirmed by the 
Council on the 27th of March. And we now look forward to the final vote in 
parliament on the SRM which is foreseen for mid-April. Once this is done, we 
will be able to sign the intergovernmental agreement, the IGA on the transfer 
and mutualization of contributions to the single resolution fund. We will come 
back to the SRM and the IGA tomorrow in the Ecofin which is an informal Ecofin 
as you know, but we will take stock of the state of play also in the Ecofin in 
the presence of some representatives of the European Parliament. And that's all 
for me. I'd like to give the floor Olli, Olli Rehn. 

Thank you, Jeroen. Let me begin with some words on the economic outlook. In 
fact, the picture has not changed substantially since I presented the 
Commission's Winter Economic Forecast in the end of February. We continue to 
project growth in the Euro area of 1.2% this year and 1.8% next year, driven by 
a gradual strengthening in domestic demand, an easing of deleveraging and fiscal
consolidation needs and on the back of improving confidence. The Commission's 
economic sentiment indicator for the Euro area rose again in March and it is now
clearly and firmly back above its long-term average. The February unemployment 
data that has just been published earlier today shows that joblessness is now 
falling in a majority of Member States with some of the sharpest improvements 
being recorded in Ireland, Latvia, and Portugal. This shows that the strong 
implementation of the economic reforms set out in the programs can deliver a 
real turnaround in job creation. The financial market situation in Europe 
remains stable and the positive long-term momentum is being continued and this 
is being supported by sustained accommodative monetary policy, expectations of 
continuing economic recovery and confidence in the positive effects of the 
banking union. Nevertheless, we need to focus on strengthening the recovery for 
the sake of stronger growth and job creation and thus it is essential to 
maintain the momentum of economic reforms now. To minimize risks to the economic
recovery, it is very important to create the right conditions for economic 
stabilization in Ukraine, in order to help stabilize also the political 
situation in the country. I reported to the Eurogroup that the Commission has 
been working intensively to prepare swiftly a package of macro-financial 
assistance for Ukraine. A staff level agreement has been reached by the IMF 
which I understand will soon be presented to the Executive Board for approval. 
This would allow also for a first disbursement to be made in parallel and 
swiftly to Ukraine by the European Union because our MFA, our macro-financial 
assistance is conditioned to be parallel to that of a standby arrangement by the
IMF. It is in the essential interest of Ukraine and Europe to maintain peace and
stability in our continent. This stability support will help in stabilizing the 
worsening economic and financial situation in the Ukraine and therefore it will 
be one vital part of achieving a political solution to the crisis. In fact the 
role that Europe can play in supporting the development of Ukraine is 
illustrated by the difference in growth performance of Ukraine and Poland over 
the past two decades. And on this, I want to show you one slide because it is 
extremely telling of the diverging growth paths between Poland and Ukraine. In 
other words, whereas the two countries started at quite similar income levels in
the early 1990s, today Poland's per capita national income at purchasing power 
parity is about two and a half times that of Ukraine. So national income or GDP 
per capita is two and a half times that of Ukraine in Poland. Of course, many 
factors have affected these divergent growth paths but it is crystal clear that 
Poland's steady course of economic and institutional reform to unleash a growth 
potential and to ensure the rule of law as well as her political and economic 
integration with the European Union have been key drivers of investment and 
growth. For Ukrainians, the Association Agreement with the European Union came 
to symbolize this difference. It became seen as a chance to enter this story of 
being left behind and actually it was not the EU that instigated the street 
demonstrations that led to the fall of the corrupted old guard. We wouldn't even
have been able to do so, but it was the European way of life, the better civil 
liberties, the better legal protection, the better living standards, that were 
behind these events. And that's why Ukraine and Ukrainians must have the right 
to determine their own future, including closer political and economic ties with
the EU, the benefits of which are very clear for the citizens of Ukraine. Let me
underline that the European Union is not making Ukraine choose between Europe 
and Russia. Instead, our view, is that it should be possible for Ukraine to 
develop closer economic and political ties with the European Union and maintain 
good neighborly relations with Russia. But of course, it takes two to tango. 
Finally, concerning Greece, I just want to endorse what Jeroen Dijsselbloem said
as regards the Eurogroup decision. We all know how difficult this adjustment has
been and how great are the challenges faced by many Greek citizens still today. 
I would like to take this opportunity of being here in Athens to acknowledge the
great efforts made by Greece over the past four years to repair the public 
finances and build a more sustainable model for growth and job creation. 

Can I just ask everyone and especially the people standing at the back to sit 
down, be quiet, or leave the room. We are working here. Thanks very much. Olli. 
Thanks very much, Jeroen. There was no easy way to resolve the problems 
confronting Greece in 2010, given the scale of economic imbalances that had 
built over so many years. But what we can say is that European solidarity and 
Greek determination came together to ensure that a far worse outcome was 
avoided. Today, the Greek economy is stabilizing and we expect a return to 
growth and a gradual recovery in employment starting this year. To strengthen 
this recovery and boost job creation, it will be essential for Greece to 
continue to embrace economic reforms, maintain sound public finances and 
facilitate targeted investments. The European Commission will continue to stand 
by Greece and support Greece in creating the conditions for sustainable growth, 
as we have until now through the program and through technical assistance 
provided by the Task Force for Greece. Thank you very much. Thank you. 

Mario, can I give you the floor? Well, thank you. I really don't have much to 
add other than remarking this moment, it's the- the Eurogroup is taking place 
here in Athens in a country that suffered greatly that is now starting to see 
the first benefits of the program, the very substantive program that has 
undertaken, where it has achieved a very remarkable progress. So the pain has 
been great, the benefits start coming. And it's also the last at the end of the 
Greek presidency so all these I think make this time especially worth of e 
attention. At this point in time, we only have two points to make. First of all,
many structural reforms have been undertaken but some more need to be 
undertaken. So, the most important thing now is to implement, fully implement 
all the structural reforms that have been agreed. And the second point concerns 
fiscal adjustment which has been truly significant in this country. And at this 
point in time, the thing not to do is don't unravel, actually the thing to do is
do not unravel the fiscal adjustment, do not unravel the progresses that with so
much pain and so much effort that have been achieved. And this recovery of this 
country is taking place as the President of the Eurogroup and the Vice President
of the Commission have remarked in within a context of a Euro area which is also
seen a gradual, albeit modest recovery. So- I'd stop here. I mean, it was a good
moment to stop here. 

Thank you. Thank you very much. Klaus. Klaus Regling. Yes, thank you. Two quick 
remarks from the EFSF and the ESM perspective first on our lending operations as
announced by the Chairman of the Eurogroup. The EFSF will be able to disperse 
EUR8.3 billion to Greece during the next three months in three tranches subject 
to national procedures, prior actions, and milestones. On Portugal, we are 
prepared to disburse EUR1.2 billion in late-April subject to the normal 
conditions. This will be the last disbursement to Portugal under the current 
program and conclude our lending which amounts in total to EUR26 billion to 
Portugal since June 2011. With these and visits disbursements, total outstanding
loans from the EFSF and ESM will amount to EUR232 billion. My second remark is 
on the ESM paid in capital. This month of April is an important moment for us 
because we will receive the fifth and final payment and paid in capital. It will
bring our paid in capital to EUR80 billion, which is the highest capital of any 
international institution around the world. And this also means that we will 
reach our potential lending capacity or EUR500 billion by the end of this month 
so number that was envisaged during the last two years. Important to note that 
90% of their potential lending capacity is uncommitted. So 90% of our lending is
available and not committed so far so that's quite reassuring. Thank very much. 
Thanks very much. 

I don't know whether we have a microphone to go around- ah, Mario, just- Just- 
let me tell you one thing. Just as much as I would like to discuss fully and 
completely all our intentions about monetary policy are concerned, we cannot do 
so because we have our monetary policy meeting this week. As a matter of fact, 
Thursday, before our monetary policy decisions and Wednesday is a preparatory 
meeting. So, I- sorry to say but I will not be able to answer questions 
concerning monetary policy. Thank you. And that takes away a lot of fingers. 

Who's left? Yes, please, the lady in the second row. And then the gentleman 
behind her, next. Sorry. I'm asked to stand up. -- from the Wall Street Journal.
Two questions, please. One in Greece. There seems to be still 1.8 billion left 
on the Eurozone side of the bailout. Why is that not being dispersed in this 
tranche and when do you expect that to be disbursed? And the second question on 
France. We understand that, Jeroen, your counterpart, Mr. Moscovici is not here,
possibly because of the reshuffle in Paris of the government. But we also heard 
French President Francois Hollande say last night that he would come to his 
counterparts into the Ecofin and ask for some slack with regards to implementing
France's commitments on its deficit so that France's economy can pick up faster 
and contribute to the Eurozone recovery. Have you received any such 
communication from Sir Hollande or the French side and how do you feel about 
that? Thank you. First question on the size of the tranches. As I said, there is
still EUR8.3 billion to be dispersed. But perhaps Klaus can shed light on where 
the confusion has come from. Yes, what you said is correct. Once we disperse 
this 8.3 billion over the next three months subject to the normal conditions, 
there is indeed 1.8 billion left and there's a current program that was never 
foreseen to be dispersed before June or July so that will be subject to the next
review. On the second question, we understand that France has a new prime 
minister since yesterday, who is now jointly with the President taking on a 
reshuffle of the cabinet. We will, of course, await the outcome of that. I have 
no information on that and there has been no request, at least not to the 
Eurogroup but Olli could confirm for more slack, as you put it. So we will await
any plans coming from the new French government. Do you have anything to add on?
Thank you. We have not received such a request and I might – such that – for
the sake of refreshing our memories, point out that the correction deadline of 
the existing deficit of France has already been extended twice in the recent 
years. And I will not comment on the ongoing political developments in France. 
Obviously, that's very clear. Considering public finances, we have taken not all
of the last year's deficit outcome which was announced yesterday by INSEE, the 
French statistical authority. What is important now is that France makes the 
necessary structural effort required this year. And in this context, they are 
looking forward to receiving France's stability program in the coming weeks 
which will feed into our next forecast in early May. I believe that it's 
essential that France acts decisively both to ensure the sustainability of its 
public finances by complying with the council recommendation and to address 
well-known bottlenecks to competitiveness and growth and thus the employment. 
Action on both fronts is needed in parallel in order to lift growth and boost 
employment for the sake of well-being of French citizens. Yes, please. Gentleman
in the third row. --. A question for President Draghi. Not getting into the 
monetary policies, can you give us a general analysis about the risk of 
deflation as spreading out in some countries of the Eurozone and if you see some
risk about some national banking system especially in – talking about the 
Eurozone, about Germany, that is the country that has spent, invested more money
– more staid money to recapitalize banks, according to the data of the 
European Commission, say 67 billion plus some hundred billions in banking 
guarantees. For the first question, come back on Thursday in Frankfurt. For the 
second question, it's a question that's often asked, what do you think of the 
banking system here or there, in this country or that country? It's really too 
early to say anything. We are in the process of doing the AQR and then stress 
tests and then at that point in time, we'll be able to comment not only on the 
banking systems but also individual situations. However, one thing that people 
should remember is that exactly the point you made, a lot of money has been 
already poured into banking systems everywhere in the Euro area. And simply 
looking at the last, I would say, six months only, you would see that many, many
banks are recapitalizing themselves, are selling assets, are really improving 
their capital positions. So a lot has been done, a lot's being done now. Thank 
you. Let's move back. The gentlemen with the glasses in the middle. -- with 
Bloomberg News. You're saying in your statement that the Greek program is fully 
financed until mid-2015 and well, for the next 12 months. And the statement says
that part of this financing will come from internal borrowing between Greek 
government agencies. Have you discussed today where will the rest of the 
financing come from? Have you discussed the process of Greece maybe - do you 
expect Greece to cover some of its financing needs from the bond markets and 
they turn to the bond markets in the next 12 months? No, it's actually we've had
reassurance from the Troika institutions that the program is fully financed and 
that Greece is fully financed for the coming 12 months. The program is still in 
light of the disbursements that will take place financed and on the base of the 
next review which I think is planned to be finalized in September, we will come 
back to the issue of financing in and beyond the program. But it was on the base
of the Troika advice that we simply took stock of the situation. The situation 
is that the program and Greece is fully financed for the next 12 months. I don't
know whether Olli would like to fill that in. Just to second what you said and 
say that the next review mission will start – the next review will start in 
the course of the summer and I hope it will run the normal expected three months
so that we don't have to spend Christmas break in Athens, even though it's a 
lovely city. But I would prefer to conclude it in time and have it done in the 
course of the coming autumn. We'll do one more question on this side. The 
gentleman who is right beside you and then we'll move to that side. Okay. -- La 
Stampa. I have two questions if I may please. First one is the economic 
situation. I mean I wonder if you discuss the possible effects of the tense 
relations with Russia and the situation in Ukraine or if you think this could 
hamper the situation of the European economies since the growth is modest right 
now. The second question is connected to the question about France. If France 
might be asking about more margins to come back from the debt, Italy is doing it
in every political and public discussion. Do you think this is just political 
propaganda or there is a margin for Italy to have more margins, I'm sorry for 
the words, but more margins to get back from the very high debt? Thank you very 
much. And sorry, my Greek colleague behind is asking me, can you ask if IMF is 
disbursing too that solidarity? On the IMF, the IMF of course takes its own 
decisions. I think it's scheduled in the IMF board later this month. So yes, the
IMF is also pleased with what we have reached and the agreement that has come 
out of the week, the view and decisions of today's Eurogroup. So that is also- 
but the IMF will then take its own decisions in its board. On the Ukraine, we 
mainly spoke as Olli said on the preparation of the IMF program which was 
introduced to us by Reza Moghadam and we were informed also by Olli. We didn't 
have a general discussion on what the possible economic effects could be of the 
crisis at the present level of tension, or future levels of tension which we 
don't know. What we do know that we all have a common interest to contain this 
crisis and reduce the tensions and reduce the risks also for our economies. And 
perhaps Olli can go into Italy and any margins that Italy might require ask for.
Thank you. Thank you Jeroen and thanks for the question as I did not comment any
French request and as you link your question concerning Italy to the French 
situation by implication, I should not comment on Italy either. And my previous 
response is from the last couple of days are still- weeks- are still valid. 
Italy will respect its European commitments and will focus on supporting 
sustainable growth and job creation while maintaining fiscal sustainability. On 
the economic situation, as Jeroen said first and foremost priority is obviously 
to ensure peace and security in Europe. I've been thinking a lot in the recent 
weeks about Europe and Europe's future and I must say that I don't feel that the
basic goal of the European Union which is to maintain peace and security in our 
continent is at all so outdated as some people already started to spin and 
perceive it. I find it is a fundamental objective of the European Union and 
that's what we have to focus today and that's why we are also promptly reacting 
in order to support the stabilization of the Ukrainian economy and have it 
overcome its difficulties. As regards the potential impact, the impact from 
Ukraine per se would be relatively limited because its trade with the European 
Union is overall is relatively limited. Concerning Russia, the Russian economy 
has already slowed down before the crisis started. And for instance, the World 
Bank is forecasting growth- zero growth for this year as a consequence of the 
recent events even without any economic sanctions. And if the tensions were to 
persist, it would be likely that Russia would end up in an economic recession if
things still got worse and if tension prevails. Of course as regards economic 
sanctions, no sensible European would want to see economic sanctions or any 
other escalation of the crisis. And in case Russia will not escalate the crisis,
then we should be able to avoid these sanctions. Okay. --. Do you think that 
Greece will not eventually need the new loan from the Eurozone and what are the 
factors that will finally determine what is going to be done with that? I'm not 
sure I understood the second question but I got the first one. The first one was
about whether Greece needs another loan at the end of this program, so I 
understand. Well I have taken note of the optimism, let's say the ambition of 
the Greek government not to have another program. And of course we would like to
share that ambition yet I think it's too early to say. I think it's of the 
utmost importance to now concentrate on fulfilling all the commitments that are 
still in the present program. Quite a lot of work still has to be done even 
though Greece has of course come a very long way and all the indicators are 
showing great progress. So let's concentrate on the program which still runs 
until the end of this year. Stick to all our commitments and fulfillments. And 
later this year, at the earliest in the summer or after the summer, we will come
back to the question, what happens after this program? And it very much depends 
on how the further development of the economics, of this state finance, et 
cetera, how they will develop over the course of this year. Yes, the lady right 
behind you. Thank you very much. 

--, Deutsche Zeitung. Sorry, but I have a quick follow-up to France. Are you 
afraid that the weakness of France is endangering Eurozone as a whole? And if 
so, are you ready to discuss – even you had already two prolongations – are 
you ready to discuss another prolongation or another flexibility for France to 
get the deficit? I think Olli Rehn has basically already answered that question 
because it's about a hypothetical – I don't think we should speculate. I think
that France is well aware of its commitments. They have already been given more 
time, as a matter of fact two years, and work is obviously still to be done. And
I'm sure that the new French Cabinet will be aware of its obligations to the 
growth and stability pact. Now, I don't think it's very useful to speculate on 
whether any requests will come from that, et cetera. (inaudible) strong funds. 
So that's the reason why I asked you if the President of France is saying it's 
in the interest of Europe to have strong funds, what are you ready to do to help
France to be strong? I would fully agree with the President of France that it is
in the interest of Europe to have a strong France. And that makes— only 
stresses the point that also France has to deliver on its commitments of the 
growth and stability pact. I think that is of importance to all of us. And a lot
of work also has to be done in France. And I think we should now await the new 
Cabinet and its proposals. Yes please, the gentleman over there. --. A question 
for Mr. Rehn, last Sunday Greek parliament passed a bill with the reforms agreed
between the Troika and the Greek government. I would like to ask if the European
Commission has any reservations about the content of this bill. For example, for
the reformat distribution of milk, is it possible to have some changes in this 
bill in the near future? 

Thank you. Thank you. I want to first of all express my appreciation to the very
intensive and hard work done by the Greek government as well as by the Greek 
parliament in completing these decisions in time for this disbursement to be 
started now shortly. That's been very important. And the decisions, especially 
concerning economic reforms and the social dividend, are very important balance 
so that we can support economic growth in Greece and, at the same time, the 
vulnerable are taken care of. At the same time, there may be some details which 
we have to study because the legal text are in Greek which is natural. And we 
may review some of the details. But I don't expect any significant or any major 
changes in this regard. 

Okay, two last questions – the gentleman with the glasses there, and then the 
lady who is two rows in front of him. --. Please continue. It's me? Okay. A 
question for you, Mr. President. Last year you were here in Athens and you said,
I believe it was May, that we will touch, we will open the Greek debt issue in 
the Eurogroup of April 2014. So we're here. And my question is, did you open the
discussion and how did you plan to work in your next meetings on the Greek debt?
Yes. I think— you haven't quoted me quite correct. What I've said is that we 
will come back to the issue of the future program and also the debt 
sustainability. But one of the things that we need is the Euro stat data which 
will come out this month. That's probably where you picked up April. But they 
will come out I think on the 27th or the 23rd or – at the end of the month we 
will have the Euro stat data. So we will come back to that. Obviously taken into
account also the question, does there need to be a follow-up program, et cetera,
what would that look like? And taken into consideration how the sovereign debt 
is developing and what the debt sustainability figures look like. But not at 
this time. Yes, the lady – I'm sorry. 

We're running out of time. --. Could you tell us a little bit more on the growth
strategy that you were discussing with the Greek government? For example, will 
it be— will there be some extra funds available for Greece in case, you know, 
depending on the progress it makes? It's a little early to say much in detail. 
But it refers of course to some of the main issues that we have to address to 
allow Greece to strengthen its growth path. These issues concern the return of 
investment, both outside and inside investments, the return of credit to SMEs, 
but also the strong coordination needed between the international institutions 
including also of course IMF, World Bank, and the European institutions. So we 
will come back to these issues, but these are some of the elements that have to 
be addressed in order to supplement the program and all the reforms that we 
already agreed with the Greek government. I think that's all for now. Thanks 
very much