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The Eurogroup took stock of the IMF's interim article IV report that concludes the euro area is turning a corner and returning to growth. Eurogroup ministers broadly agreed with the International Monetary Fund's assessment of the euro area's economic outlook and on where action continues to be needed.
In its interim article IV mission report, the IMF confirmed that the euro area is turning a corner thanks to measures implemented at both European and national levels. The economy was found to be returning to growth and financial markets have rallied at the improved growth prospects. Sovereign yields have decreased and bank funding conditions have improved significantly.
The Eurogroup ministers concurred with the IMF that further progress towards completing a banking union was needed by the end of the year. They also underlined that structural reforms and maintaining balanced budgets will remain priorities throughout the euro area. Both were considered key to maintaining growth and competitiveness. The IMF will present its full article IV mission report mid-2014.
IMF-confirms euro area's improving growth prospects
President Dijsselbloem statement
Eurogroup Work Programme for the first half of 2014
Speaking at the press conference, VP Rehn said:
"To begin with, let me say that we very broadly agree with the IMF’s assessment of the recent developments and challenges facing the euro area, which we discussed this evening. I note the Fund’s conclusion that policy actions in the euro area and at national level have set the stage for the recovery. And I very much concur with the IMF that the challenge now is to move beyond stabilisation and secure a strong and durable economic recovery. This means staying the course of economic reform and completing the reconstruction of the eurozone."
Ireland
"As Jeroen said, this evening the Eurogroup agreed on the conclusion of the twelfth and final review of the economic adjustment programme for Ireland. To my mind, the successful conclusion of the Irish programme is a strong signal that our common response to the crisis is delivering results. It is also a clear demonstration of what may seem obvious, but sometimes needs to be said explicitly: it is that an adjustment programme has a beginning and an end. And the path between those two points is smoothest when there is determined implementation by the country concerned. This has been the case for Ireland.
Of course, this has been a joint effort. First and foremost by the Irish people and the Irish authorities. But also by Ireland’s partners, who first provided the country with financial assistance and then strengthened their support by eliminating lending margins, and twice extending average maturities on Ireland’s loans to almost 20 years. These steps have further enhanced the sustainability of Ireland’s public debt.
Today, Ireland’s banking sector, which was at the heart of its crisis in 2010 or before and up to 2010, is well on the road to repair, which is essential for a durable recovery, as it is essential for lending to real economy, to businesses and households. And particularly welcome are the latest figures showing that both the fall in unemployment and the pace of job creation have reached their fastest levels in several years in Ireland.
Once it exits the programme, Ireland will move back into the normal economic governance procedures applicable to all euro area Member States. In addition, as is the case for all former programme countries, post-programme surveillance will be carried out in line with the rules agreed earlier this year and set out in the Two Pack."
Greece
"As you know, discussions on the ongoing review have been continuing in recent weeks from headquarters. Now this week, on Wednesday, our mission chiefs will return to Athens for a technical mission of around one week, which will focus on issues which need to be legislated by the end of the year. We expect our mission chiefs will return with a full negotiating team in January, with a view to reaching a staff level agreement as swiftly as possible. Of course we will make every effort to close as many issues as possible by the end of the year. The bulk of the remaining issues are about reforms for recovery, about job creation, about social fairness.
We also said that the efforts made by the Greek authorities and the Greek people have allowed the country to address many deep-seated structural problems and this has helped to create the conditions for a return to sustainable growth. The Greek economy is now stabilising and should expand again next year. Now it is essential to stay the course of reform, to strengthen this recovery that is now around the corner. The Commission will continue to stand by Greece and support the country through this difficult but necessary economic adjustment."