"We discussed the request by Portugal to get away to allow them to pay off some of the IMF loans first of all, and I am happy to tell you that the Eurogroup has lent its support in principle to Portugal's plan to repay the IMF loans early by refinancing at current low interest rates, Portugal can make significant savings on debt service. This will off course help with Portugal's debt sustainability.
Like Ireland, which recently started its own early repayments to the IMF, Portugal is demonstrating how quickly a country can be back on its own two feet after a successful adjustment program, provided ownership and commitment to ongoing reforms.
Of course this subject will also be discussed tomorrow in the ECOFIN Council given the involvement of the IFSM and then national procedures can start, but we hope to conclude this decision making process in the time of a month.
On Cyprus, we took stock of the state of play of the program. The foreclosure framework is the hurdle right now. This framework is needed to let banks clean their balance sheets and get back to their core business of lending money to the economy, given the very high ratio of non-performing loans. So this is an important element in the economic recovery program for Cyprus.
If and only if this hurdle can be overcome, the program can be brought back on track. This is why we call on all involved Cypriot decision-makers to implement this framework as soon as possible.
Economic situation and other euro area topics
We also took stock of the economic situation in the Euro zone on the basis of the winter forecast. Possibly the Commissioner will debrief more on that.
I debriefed my colleagues on last Thursday's informal European Council where we discussed the state of the monetary union in preparing working towards the 4 presidents report which is now planed for June. Finally, we had a discussion on the international role of the euro. This was an issue that was brought up by our French colleague some months ago and now was prepared by the Commission. The euro remains important as a reserve currency, as a trade currency and as a parallel currency in neighbouring countries.
At the same time, some euro area firms face extra costs when they trade in markets that use other currencies. This issue was recognized by all and even though we all agreed that the international role of the euro was and should be mostly market-driven, one can look and we will look more in depth on the reasons and possible obstacles for using the euro in international trade in specific sectors. We've asked the Commission and the euro working group to look into this specific issue in more detail and then we will come back to it in the second half of this year.
Then turning to the Greece, as you remember the outcome of the last Eurogroup was that in the end we did not agree on the way forward. We have been drafting the statement but we couldn't finalize, we did not get the final agreement on that.
The day after I spoke to Prime Minister Tsipras and together with him we've agreed to ask the institutions to at least start the technical work, the technical assessment of where are we in the current program, what are the elements that the new government could agree to. There was an assumption of 70/30 - they could possibly agree to 70% but not to 30% - so we asked the institutions to look at that assumption and then to look at possible replacement measures that which would come from the new Greek government's plans to fill in the 30.
In general the reaction of the ministers of the Eurogroup with a slice of disappointment on the outcome of those talks. Much appreciation to the people who did the work over the course of the weekend. Disappointment over the fact that there was still no firm common ground on what such an adjustment in the program could look like and how much of the program would actually be carried forward by the new Greek government.
The last couple of days right up till the start of the meeting we also talked with Greek colleagues to see whether we could find adjustments in statements on further steps and we were unable to do so at the start of the meeting.
In the meeting, after we were informed by the institutions on the state of play in the program and the 70/30 assumption, we had a round of debates on the steps forward. The general feeling in the Eurogroup is still that the best way forward for the Greek authorities would be to seek and extension of the program.
The main reason for that is that given the ongoing discussions about how the program should work and the future arrangement for Greece should look like, we simply need more time and the best way for that is to at this point to extent the current program which would then allow us a number of time, a number of months to work on future arrangements."
Full press release
Remarks by Pierre Moscovici
© Council of the European Union
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