Remarks by Jeroen Dijsselbloem following the Eurogroup meeting of 10 July 2017
mluvčí předsedy Euroskupiny
Good evening everyone and welcome to this Eurogroup press conference.
Today, we had a lot of guests in our meeting: Danièle Nouy, the Chair of the ECB Banking Supervision; Elke König, Chair of the Single Resolution Board; Professor Niels Thygesen, Chair of the European Fiscal Board; Sharon Donnery, she is the deputy governor of the Bank of Ireland and chairs a working group on NPLs in the ECB. In addition to Commissioner Moscovici and Vice President Dombrovskis who join us on a regular basis, this time we also had the benefit of the company of Commissioner Vestager.
We started with a discussion on insolvency frameworks which is a topic that is on our agenda very often, sometimes in general terms and sometimes very specific when we talk about specific banks. This was a more general discussion we had on the basis of the introduction that Sharon Donnery gave us on the work the ECB has been doing on insolvency framework - and I don't have to tell you how important it is to make progress in dealing with legacy issues in the banking system and to support macro-economic adjustment transmission of monetary policy. We will continue the work on that, building on the different reports we are getting from the ECB, from the Commission. The Commission is working on a system of benchmarking and peer reviews and we will come back to that next year. Of course, also ECOFIN will be discussing non performing loans tomorrow, where these issues are also very relevant.
Then, we discussed specific bank cases. Last month, we discussed Banco Populare, the Spanish bank. This month, we discussed the two Venetian banks and we were informed by the different institutions on their role in the decisions that were taken on these banks. I think it is good to point out that the coordination between the institutions is also new for them. The coordination between the institutions involved was efficient and that experience is being built-up as we go along. We are still in the early days of actually putting to work the new resolution frameworks.
Clearly, to put emphasis first of all on the positive sides, we welcomed the ongoing work with the banks. The ongoing positive restructuring of banks having to deal with legacy issues in different banks makes it more complex and more challenging. Each case is different and has to be assessed individually. We welcomed the information provided by the institutions on the confirmation by the institutions that all decisions were taken in full respect of the European legal framework.
However, there is still work to do and lessons to be learnt in terms of possible policy implications. The recent cases have raised a number of issues today, and there may be other areas for improvement and fine-tuning, including the need to ensure consistency.
A couple of topics that were brought up in this context: the importance of harmonising national insolvency frameworks - there are still big differences there which have again come forward in the Italian cases. There is the topic of establishing sound buffers of bail-inable capital, the MRELs. A very important topic is the hierarchy of creditors, getting a very clear creditor hierarchy in the eurozone area, and the proposals of the Commission are being pushed forward at this point. The topic of protecting retail investors: this was of course part of the legacy issues that had to be dealt with. The importance of having sound asset evaluation in the process of dealing with banks to allow also outside investors to participate. They are helped by maximum transparency on the quality of assets. So having an AQR, when possible, is also very important.
And finally, all of this could be put on our agenda to finalise the banking union. Some of the elements we have mentioned, the lessons that we can learn, can be taken forward when we finalise the banking union. Inevitably, that requires both risk reduction and risk sharing.
The institutions have also said that, later on, they will perform a post-mortem analysis of these resolution cases, in more details, and the Commission will review the BRRD in 2018.
After that, the next topic was the post-programme mission to Ireland which already took place in May. We congratulated the Irish authorities on their continued strong economic performance and welcomed that repayment risks, as assessed by the institutions, remain very low.
The next topic was the euro area fiscal stance for 2018. We now have 16 consecutive quarters of growth in the euro area. So we had some debate on whether we can still talk about the recovery phase or whether we are now in the expansion phase. Of course, it depends a little on what perspective you take, but the fact that we have this discussion is a very positive sign. The output cap is closing, and for some countries has already closed. The risk of deflation is disappearing and there is no direct sign of overheating in our economies. So that is where we stand economically. On that basis, both the Commission and the European Fiscal Board advised a broadly neutral stance. So that is what we are taking into consideration when we prepare our draft budgetary plans at national level. We will come back to that later on, after the summer, but this is the starting point of our budgetary processes.
The final topic and our last discussion was on the deepening of the economic and monetary union (EMU), on the basis of the Commission's reflection paper. We had a first general round of discussion with the Ministers. We will have a second round for the EU ministers, but a more broad discussion in Tallinn, when we have the informal Ecofin after the summer. So this was just a first kick-off. We talked about the importance of convergence and what is needed to strengthen and speed up the process of convergence. Some elements are, of course, about finishing off what we have started. So this is about the banking union, the capital markets union, deepening the single market. Second strand: structural reforms. How we can get the incentives right to support and push the structural reform agenda in the different member states. That can be supported by investment instruments, by using the EU budget, using benchmarks, etc. We have also talked, which is sort of the second big issue, about creating long-term stability and shock-absorption - of course, a number of proposals in the Commission's paper regarding the shock-absorption of our member states individually but also the Eurozone as a whole. We had a first exchange on those topics. We will come back to that after the summer in Tallinn.
Thanks and pass floor to the Commission.