"The agreement we reached on the ESM Treaty and on the backstop is good news for the stability and resilience of the euro area and as such it is good news forour citizens and businesses."
Good evening, the meeting today was a very good one, it was a success.
First of all let me pay tribute to Paschal, the President of the
Eurogroup, because in these weeks he worked very hard building on
the work of his predecessors, but without his steering, inclusiveness
and commitment this agreement would have been much more
difficult. Thank you Paschal, it was really a great contribution to this
success.
We were able to reach this agreement also on the basis of the risk
reduction that we analysed today. The situation of the banking sector
is far more resilient than it was ten years ago and without this, this
new agreement would have been much more difficult. The agreement we
reached on the ESM Treaty and on the backstop is good news for the
stability and resilience of the euro area and as such it is good news
forour citizens and businesses. We are not at the end, we have now the
signature of the Treaty and the ratification process but today we really
made a substantial step and it was a great success. It
also demonstrates the will of compromise amongministers with the
President's role that I think is very promising for the challenges ahead
of us.
We began our discussion with an exchange of views with Kristalina
Georgieva on the IMF's Article IV assessment of the euro area. We
were pleased to see how similar is the assessment of the IMF and the
one we made as Commission.
The Managing Director made three points that I deem very important:
First, on the need to ensure an effective deployment of Next Generation EU.
Second, on the fact that pandemics tend to worsen inequality and that
this pandemic will be no exception. We should work strongly to avoid
the increase of inequalities among regions, generations and the
society.
Third, on the importance of not withdrawing policy support too
soon. We are well aware of the risks that this would entail. We have
made very clear that fiscal policy should continue to support the
economic recovery in 2021.
I will not run through the conclusions of the post-programme
surveillance reports for Cyprus, Ireland, Portugal and Spain, I will
just recall the conclusion:all countries retain their capacity to repay
their debt vis-à-vis the ESM.
On Greece, I presented the 8th enhanced surveillance report. Our key
conclusion was that, in spite of the adverse circumstances caused by the
pandemic, Greece has taken the necessary actions to enact its reform
commitments. Most notable is the major reform of the
insolvency framework, which should be swiftly implemented via the
adoption of secondary legislation and the roll-out of the necessary IT
system.
There has also been good progress with fiscal-structural reforms,
speeding up public investments, and reforms of public administration.
So, some welcome and well-deserved good news for Greece today despite
the difficult situation and the role ahead of the country. For this
reason, the Eurogroup has agreed to the release of the next set of debt
measures, worth €767 million.
One final word on draft budgetary plans, because, as Paschal said, we will come back to these only in two weeks' time.
What is clear is that we are moving gradually from emergency to
recovery, in 2021 two thirds of the measures planned for next
year, worth around 1.5% of GDP, are not emergency but of a more general
recovery-supporting nature, only 1% will still be emergency measures.
Member states will have to assess whether to extend the emergency
support or to withdraw it. The premature withdrawal would be a
mistake. When adjusted for the expected withdrawal of emergency
emergencies, the euro area fiscal stance in 2021 should continue to be
supportive (+1.4% of GDP), which is the right stance at this time.
Speech
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