In an interview with the Greek publication To Vima, Asmussen elaborated on the current situation in Greece. He also touched on i.a. the German elections and Banking Union.
Greece
There is a clear Eurogroup decision, which is public, from the 27th of November last year. These conditions define the timeframe. When Greece has reached a primary surplus on an annual basis, the programme is fully implemented and the debt level still considered to be too high, then European partners will consider additional measures. This will be known by spring next year, the outcome for the fiscal year 2013.
As regards the future, there is a clear paragraph in the November 2012 Eurogroup statement. It says that the European partners commit to provide assistance to Greece during the life of the programme and beyond if Greece has not regained capital market access and implements fully the adjustment programme.
The programme from the beginning consisted of two pillars: the fiscal side and the “growth-enhancing” structural reforms side. On the fiscal side, we have really seen significant progress. It is a significant progress compared to any other fiscal adjustment after World War II. It was necessary because of the unsustainable fiscal situation and we have to pay respect to the efforts. During my talks I received an update about the fiscal situation after the first seven months and if it continues like this, a primary balance by the end of the year as the programme foresees is in reach.
It is undisputed that we have a fiscal gap for the years 2015-2016. We have to see how big it will be. Then we have to discuss, as part of the Medium Term Fiscal Strategy (MTFS), how to close it. We need a credible MTFS in order to re-enter capital markets. This is unavoidable. I understand the difficult political situation and the majority situation in the Parliament but as I said one should not unravel what has been achieved - with political pain - up to now.
What is, in your view, the most important problem Europe is facing today?
“There are a number of things. The biggest risk to the positive trend I see is that we are not doing enough – that we are in positive territory, that markets stay calm. So, the biggest risk is complacency and reform fatigue. The second one that worries me is that in this crisis we see national stereotypes resurface. I believed my generation would have overcome this but this is untrue neither in Northern nor in Southern Europe. The third thing is how do we re-develop the European project? Every generation has to redefine what we mean by this. The banking union is the first element, but we also need a fiscal union, a democratically legitimate political union. The fourth is how do we stay competitive in a globalizing world? We have discussed Europe. But we are very much inward looking while the rest of the world is moving. How do we stay competitive in an ageing society?”.
Full interview
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