14 May 2012

Eurogroup: Euro area - fiscal consolidation and growth-orientated policies are not in contradiction

At their meeting on 14 May, the Eurogroup (the finance ministers of the Member States whose currency is the euro) discussed the economic situation and outlook, as well as the fiscal strategy for the euro countries.

The ministers discussed the European economic forecast, drafted by the European Commission, which predicts a slow recovery for the EU and for the euro area economies in the second part of 2012, stating that at the moment the European economy is "in a mild recession".

The ministers confirmed that the current consolidation strategy undertaken will be pursued further. "It will continue to be the cornerstone of our strategy to correct our fiscal and macro-economic imbalances, overcome the crisis and return to a sustainable growth path", said Jean-Claude Juncker, the President of the Eurogroup and the Prime Minister of Luxembourg, adding that "there is no contradiction between the fiscal consolidation and growth-oriented policies. To the contrary, they are mutually reinforcing".

Developments in Spain

The Eurogroup welcomed "and fully supported" the measures that the Spanish government announced on 11 May to reform the banking sector further in order to bolster investor confidence and address the remaining vulnerabilities in the Spanish banks. "We call on the Spanish authorities to speed up the exteranal assessment of the situation in the banking sector and to take the necessary steps to put in place credible backstop mechanisms that can be used in case of need", said Mr Juncker.

Situation in Greece

"The Eurogroup looks forward to the swift formation of the new Greek government that will take ownership of the programme and that has a sufficient parliamentary majority to implement fully the agreed policy conditionality", said Mr Juncker.

The Eurogroup President confirmed that the Member States are determined to provide the further financial assistance needed, adding that "continued fiscal and structural reforms are Greece’s best guarantees to a more prosperous future in the euro area". The next disbursement of €1 billion to Greece is scheduled before the end of June. "Our unshakeable desire is to maintain Greece within the euro area. We will do everything possible to that effect", said Mr Junker.

Progress in Ireland and Portugal

The ministers briefly discussed and welcomed the positive and steadfast progress that the two states are making in the implementation of their programmes.

Press release

© European Council