20 February 2017

Remarks by J.Dijsselbloem and Pierre Moscovici following the Eurogroup meeting

On the euro area economy, the recovery is clearly on track. There are lots of risks, downward risks also looming outside Europe and outside the euro area. Yet we are entering the fourth consecutive year of economic recovery and the recovery is gradually becoming stronger; real GDP grew steadily at 1.7% last year. 

Lots of positive signs coming from different euro area members states; the rate of unemployment is going down in most countries. I'll stop there and let the commissioner say more about that. 

Let me come quickly to the topic that probably interests you most today which is Greece. 

We have intensified talks in the last week, week and a half, with the institutions and the Greek government, to find enough common ground for the institutions to go back to Athens. The outcome of today is that they will go back to Athens in a very short time. They will work with the Greek authorities on the additional package of structural reforms; looking at the tax system, the pensions system, also labour market regulation. There will be a change in the policy mix, moving away from austerity and putting more emphasis on deep reforms, which has also been a key element for the IMF. So that is I think a good step and we have to realize that there is no agreement, there is no political agreement at this point, as that would be too early. It is a very positive and good step that the institutions have enough confidence and a common agreement to go back to Athens. 

A lot of work still needs to be done. I already mentioned the kind of reforms that it's about. In any country the combination of these topics would be difficult, so we will allow the institutions and the Greek government to do that work on the ground in more technical detail. 

And they will return to the Eurogroup if and when there is a staff level agreement and then we will have a final political discussion on the latest stages of the programme, on how to move forward. 

So, very happy with that outcome for today. Broad support, institutions willing and ready to go, and we hope to come back to you as soon as possible. 

On that element of time, because I know you will be asking about that, there is no liquidity issue in the short run for Greece. But I think we all feel a sense of urgency because of the key issue of confidence. If you want economic growth in Greece to continue and to start picking up, confidence is a key factor. That confidence has been returning in the last year and needs to strengthen, and we don't want to jeopardize that. So that would be a strong motivator to do the work as soon as possible. [...]

Full statement

Commissioner Moscovici's introductory remarks at the Eurogroup press conference

The further fiscal measures to be pre-legislated for the period immediately following the programme will serve to reassure all partners of Greece's commitment to maintaining sound fiscal policies in the future.

Let's be clear, we still have some hard work ahead of us. Everything is not finished today. We still need to narrow our differences in terms of fiscal projections. And we still need to agree on all the details of the policy package to conclude the second review. But as I have always said, where there's a will, there's a way – and today we have clearly seen that the will is there.

We will in particular work to support efforts to boost employment in Greece. In terms of labour market measures, we will work to swiftly finalise our common understanding. We also stand ready to support Greece in its efforts to roll out active labour market policies and to explore how best to provide the necessary financing for this and the Commission is clearly committed to help the Greek authorities in that direction.

I would like to underline the fact that all actors today recognised the progress that Greece has made in economic and budgetary terms:

•         As a reminder, the economy is expected to have grown by 0.3% in 2016, compared to initial projections of another year of recession. And with confidence coming back in Greece, growth should be at 2.7% for this year and around 3% for next year.
•         At the same time, fiscal data continue to surprise on the positive side. Full-year budget execution data for 2016 showed strong dynamics on the revenue side with expenditures having developed below budgeted ceilings. And January data on revenue collection confirm the continuation of these trends.
•         Moreover, it is now evident that Greece has significantly over-performed its 2016 primary surplus target – likely to achieve a surplus of at least 2% of GDP, compared to the programme target of 0.5%. If this is confirmed by Eurostat in April, it would also mean the primary surplus has already surpassed its 2017 target of 1.75% of GDP and is already well on the way to meet its 2018 global goal.
•         We need to nurture and we need to strengthen this progress. This is why it is so important to now accelerate along the path to an overall agreement, to build on this positive dynamic for Greece.

Full statement

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