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23 November 2015

Remarks by J. Dijsselbloem and Commissioner Moscovici following the Eurogroup meeting

Eurogroup's President Dijsselbloem and Commissioner for Economic and Financial Affairs Moscovici outline the main results of the metting on the Draft Budgetary Plans and on the discussions on Greece.

First on Greece. Before the Eurogroup, a Board of Directors of the ESM meeting took place to take the formal decision on disbursement. There are two elements here, first of all of course there is this situation with the first set of milestones which now have been implemented. One issue has been moved on to the second set of milestones which is linked to the pension reform, but all the other issues have been dealt with and that opens up the possibility to transfer the €2 billion disbursement. Connected to that is of course the money reserved for the recapitalization of the banks. The formal decision on the transfer of the required funds for the recapitalisation of banks will be taken by the ESM Board of Directors - we don't know the exact figures yet - following the relevant state aid decision which the Commission will have to take on a case-by-case basis. So we can't prejudge that. 

We made quite clear that the recapitalisation exercise is being carried out the way that we have agreed, so in line with BRRD but also in line with the Eurogroup statement of 14 August 2015.

[...] Also an important point is the strong implementation of the NPL strategy. This is crucial for the success of the whole recapitalisation process. It is also crucial for and was underlined by the IMF. [...] we have welcomed the commitment by the Greek authorities that they will implement the second set of milestones by mid-December 2015 as well as take all necessary decisions needed to remove bottlenecks on key projects co-funded by the EU and the EIB. 

Then on DBPs[...]

Returning to the different groups of countries - the first remark I would like to make is that Portugal did not submit a draft budgetary plan, which is not in line with the rules, so we have to be firm there. Yet the current caretaker government in Portugal is for constitutional reasons not allowed to now put forward the draft budgetary plan and submit it, so we will have to wait for the new government to come in. Second of course Cyprus and Greece which are in macroeconomic adjustment programmes and were also not a part of our discussions today. [...]

Let me distinguish country-by-country. Austria has committed to implement measures necessary to insure that its 2016 budget will be compliant with the rules of the preventive arm. Italy - there are couple of issues which Commissioner Moscovici will probably say more about, it having to do with the eligibility for different kinds of flexibility. That is still open and the Commission will make an assessment in the spring of 2016. There is also the issue, also in Austria but also in Italy, of the costs of the asylum crisis at the moment. As you know, the Commission will take that case-by-case into consideration ex post. Also here, Italy has given its commitment to implement any measures necessary to ensure the budget will be compliant. Lithuania - I can't give you much detail there - also the Finance Minister has given his strong commitment to implement measures if and when necessary to ensure that the budget will be compliant. 

Finally, Spain. As you know, Spain had sent its budget early, and we had a first discussion already in September-October 2015. The Spanish government itself did not take any action, it will be left up to the next government to make sure that the budget, where necessary, will take on the new measures, to make sure that it is compliant with the rules of the SGP. 

Full statement

Commissioner Moscovici's remarks at the Eurogroup press conference

[...] If you look at Member States, you also see that there are these categories mentioned by Jeroen. I will just comment on two problems that you mentioned.

The first one is about Italy. There are strong reforms in Italy and now the country is getting out of the recession. It is a good point. But there is also a request by the Italian Government of all flexibilities possibly existing in the SGP: about structural reforms, about investment, about the refugee clauses.

We will take the time until the spring to check whether and how and in what proportion these clauses can benefit to Italy. On structural reforms, the point is a new 0.1% of GDP requested by Italy. It needs to be demonstrated that the structural reforms justify that. On the investment clause, Italy is the only country eligible to this clause, but there is a need to show also how important the investments are.

And for the refugee clause, that is my second point, which is not only for Italy, we had the occasion with the Vice President Dombrovskis to say again that this will be examined in a case by case approach and ex-post approach. [...]

Full statement

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