11 March 2019

Main results - Eurogroup

The Eurogroup discussed progress Greece made with reforms. Ministers also held a thematic discussion on housing markets and, in inclusive format, looked at features of the budgetary instrument for convergence and competitiveness for the eurozone.

Greece - 2nd enhanced surveillance report

The European Commission informed the Eurogroup on the main findings of the 2nd enhanced surveillance mission to Greece.

The Commission adopted a decision on 11 July to activate the enhanced surveillance framework for Greece, which entered into force following the end of the ESM programme, in August 2018.

The quarterly enhanced surveillance reports enable close monitoring of the economic, fiscal and financial situationand the post programme policy commitments, as agreed by the June 2018 Eurogroup. [...]

Thematic discussion on growth and jobs - housing markets

The Eurogroup discussed the housing markets in the eurozone on the basis of a technical note by the Commission and an oral presentation by Professor Lars E.O. Svensson, Professor of Economics at the Stockholm School of Economics and former Deputy Governor of the Sveriges Riksbank.

Housing markets developments are of key relevance for macroeconomic stability, and thus for the economic resilience of the Economic and Monetary Union (EMU).

Latvia's updated draft budget plan

The Eurogroup discussed the updated draft budgetary plan of Latvia for 2019 and issued a statement. 

Eurogroup statement on the updated draft budgetary plan for Latvia for 2019, 11 March 2019

Inclusive format

Budgetary instrument - focus on the expenditure side

Following the mandate received by EU leaders at the 14 December Euro Summit, the Eurogroup in inclusive format continued to discuss the deepening of the Economic and Monetary Union.

Ministers exchanged views on the features of the budgetary instrument for convergence and competitiveness for the euro area, and European Exchange Rate Mechanism (ERM II) member states on a voluntary basis, with a focus on expenditure related aspects.

Full press release

Remarks by M. Centeno following the Eurogroup meeting of 11 March 2019

[...]We also discussed Greece. It’s been a while since we talked about Greece. A lot of water has passed under the bridge. For instance, Greece has recently issued a long term bond, 10 year maturity. This is a milestone in the country’s return to normal market functioning and it reinforces Greece’s fiscal buffer. Also, the budget for 2019 was adopted projecting that the primary surplus target of 3.5% of GDP will again be achieved. It will be the fourth year in a row that Greece will deliver on this target. This shows that the government’s commitment with sound public finances outlives the programme. [...]

Finally we took stock of the economic situation in the euro area, which shows a temporary slowdown – that is less good news. The ECB presented to us its latest staff projections. It is clear that the euro area economic expansion has slowed its pace, but there are some green shoots out there. Wages and employment are still going up, investment growth is now close to pre-crisis levels, and the latest figures show services sector are rebounding. Macroeconomic policies are also supporting economic activity. The risks we face are well known, but the underlying fundamentals of the euro area are strong. Importantly, the ECB and the Commission both forecast growth will pick up next year, which is why we still see this slowdown as temporary.

Our last point was also the longest. We picked up on our ongoing discussions on the key features of the budgetary instrument for convergence and competitiveness that was agreed by Leaders in December. Today we focused on the expenditure-related aspects.

There is broad agreement that this tool should support both structural reforms and public investment, in line with priorities and challenges identified in the European Semester. Many of us favour an integrated approach, which would allow packages of investment programs and reform measures backed by financial support, to be proposed by members. Overall, the preferred form of delivery is via grants but there is also some support for loans.

This tool needs to encourage ownership. It must promote an efficient allocation of resources, good quality investment projects and efficient reforms.

 

There is some support to establish as requirement that Member States co-finance a portion of the investment and reform package at the national level. There is also support to explore the possibility of reducing member states co-financing rates in case of severe downturns. [...]

Full remarks

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