Monday, December 4, 2017

Eurogroup Meeting - Mário Centeno is the new President of Eurogroup - Good news for Greece - Cyprus is exceeding expectations..

Press Release - Remarks by J. Dijsselbloem following the Eurogroup meeting of 4 December 2017

Good evening everyone and welcome to this first press conference of today. We will have a second one after the second part of Eurogroup later today with our inclusive format on Deepening of EMU.

Let me first of all say I'm happy to announce that the Eurogroup has elected my successor, Mário Centeno, who will take on the role of the President of Eurogroup as of 13 January 2018. My congratulations to him. Before I give him the floor, let me say that we had four excellent candidates and I want to thank them all also here, publicly - for coming forward, putting their candidacy forward, showing their interest in and commitment to the work of the Eurogroup, and their sportsmanship in this election process.

I will not be providing any details on numbers in the election in the voting process. It suffices to say that Mário Centeno emerged as the successful candidate after two rounds, and he now commands the unanimous support of the Eurogroup.

(Gives the floor to Mário Centeno)

Thank you Mário. I wish you well in your future role. Let me just quickly run over the other items of today's meeting.

On Greece, first of all, there was good news. Teams are just back from Athens and the hard work that has been put in by the team of institutions, but also certainly by the Greek teams have led to Staff Level Agreement on policy conditionality.

The next steps will now be for the Greek government to implement the prior actions that have been agreed. They will do so already for the large part before Christmas, at least to mine understanding, and some of it will be done shortly after the beginning of next year, allowing the institutions then to see whether everything has been put in place in a compliance report. And then the Eurogroup on the 22 January could take the formal decisions. Very good news, it's been a hard work and it shows commitment from all sides.

Today, the Eurogroup also discussed the draft budgetary plans for 2018 and the budgetary outlook for the euro area as a whole.

The economic situation throughout the euro zone has improved and is improving. Almost every quarter, the growth estimates are revised upwards. Growth is broad-based, strong employment creation and public deficits going down across the board. Also the aggregate debt level is expected to come down, even though still at a moderate pace. This is the time to take steps, to create that fiscal space that we need, in case the economy would slow down again. Now is the time to bring down those debt levels to create that fiscal space for the future. That is true for the many of the members states still.

We have reviewed the Commission's assessment on the 18 draft budgetary plans. According to this (read the detailed statement), there are risks of non compliance for Belgium, France, Italy, Austria, Portugal and Slovenia. We have invited these member states to consider in a timely manner the necessary additional measures to address the risks identified by the Commission and to ensure that their 2018 budgets will be compliant with SGP provisions. As always, the Eurogroup will monitor these cases carefully and follow-up in early spring (2018).

Further, the Eurogroup will come back to the cases of Germany, Spain and Austria, after they have submitted definitive budget plans and the Commission has given its opinion on those definitive budget plans.

These budgets and these efforts have resulted in the last couple of years in a slight reduction of the tax burden on labour in the euro area - one of the themes that we've been focusing on in the last couple of years, thematic discussions. The key focus of course is to bring down the tax wage on labour, particularly for the bottom part of the labour market. The Commission has put out a paper showing the results so far. Six countries have shown, particularly for that bottom part labour market that is so important, a progress. This is important and good news and I hope that we can continue our efforts on this theme.

Finally, we discussed two cases of post programme surveillance.

For Spain, very positive news on both the macroeconomic and financial sector front - imbalances unwinding, despite some remaining sector-specific challenges.

For Cyprus, a year and a half after exiting the programme, Cyprus is exceeding expectations, particularly on growth. We praised the macroeconomic and fiscal performance of Cyprus and emphasised the need to tackle the high level of non performing loans and continue the reform momentum, but overall also for Cyprus a very positive picture.

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