Remarks by Jeroen Dijsselbloem at the press conference following the Eurogroup meeting of 20 February 2015
Eurogroup President Spokesperson
Good evening and welcome to this press conference. We had a very intense meeting regarding a very important decision on the request for extension of the Greek programme. It was intense because it was about building trust between us. The trust on a basis of the agreements and changes in them that will have to be worked out. There is a hope to reach in the end a positive outcome in terms of successful review and conclusion of the programme in time and that requires trust. I think tonight was a first step in this process of rebuilding it. As you know trust leaves quicker then it comes and tonight was a very important, I think, step in that process.
I am glad to report you that the work that we've done over the last weeks has paid off. We have established a common ground again to reach the agreement on the statement. Statement outlines the details of our agreement. I will not read it out but I will outline the main elements:
- Yesterday we received a request letter from the Greek authorities for an extension of the MFFA for 4 months. Actually I've requested for 6 months, but our decision is to extend it for 4 months;
- In parallel, the Greek authorities also requested to extend the availability period of the EFSF bonds in the HFSF buffer. In view of the assessment of the institutions the Eurogroup agrees that these funds should be held by the EFSF, free of third party rights for the duration of the MFFA extension. These funds which are mend for recapitalisation of banks and therefore will remain available for the duration of the extended agreement and can be used for the purpose of bank recapitalisation in Greece.
The purpose of the request by the Greek government is to allow for the successful completion of the review on the basis of the conditions of the current agreements. As mentioned in my last press conference, there is flexibility in the programme, and we will make the best use of it. This flexibility will be considered jointly with the Greek authorities and the institutions.
It will also allow us to bridge the time for discussions between the Eurogroup, the institutions and Greece, on a possible follow-up arrangement in which the IMF will also continue to play its role.
Let me recall that the formal, successful conclusion of the review will allow for the disbursement of the outstanding tranche of the current EFSF programme and the transfer of the 2014 SMP profits. Both will be subject to approval by the Eurogroup, but as I said - based on the successful conclusion of the review and this is a precondition.
As we concluded already in our meeting on Monday, a request for extending the programme needed to be underpinned by commitments from the new Greek government. They are outlined, part of them in the letter and part of them in the statement upon which we've agreed tonight. I would like to stress a few key commitments:
- The authorities have today expressed their strong commitment to a broader and deeper structural reform process and gave their firm commitment to, with immediate effect, refrain from any rollback of measures and unilateral actions that would negatively impact fiscal targets, economic recovery or financial stability which are the 3 key cornerstones of the programme, as assessed by the institutions;
- In addition, the Greek authorities have reiterated today their unequivocal commitment to honour their financial obligations to all their creditors fully and timely;
- On the fiscal side, the Greek authorities have committed to ensure the primary fiscal surpluses or financing proceeds required to guarantee debt sustainability in line with our Eurogroup November 2012 agreement. At the same time, the institutions will, for the primary surplus target for this year, take the economic circumstances into account.
On the basis of these commitments given in the letter and in today's statement we will start the process which will hopefully lead to the successful decision on the extension of the programme. The first step, that we've agreed together with the Greek authorities, in this process is to present the first list of their reform ambitions. Reform measures based first of all of course on the current arrangements, but also using the flexibility that is in the programmes. This first list of reform measures should be available and presented on Monday. The institutions will then provide us with a first view whether this is sufficiently comprehensive to be a valid starting point of the process which will ultimately lead to a successful conclusion of the review. So Monday, to summarize - first list of reform measures from the Greek side. The institutions will look at that and give us their first view on whether this is a sufficiently comprehensive as a starting point for the process which will of course in the end hopefully lead to a successful conclusion of the review.
If the outcome, of course this is our assumption, of that process is positive, that will allow us on Tuesday morning to start the national procedures and that will be the starting point of the formal procedure-decision making.
This list of the first reforms by the Greek government will later on be further specified, given details and then be assessed and agreed with the institutions, ultimately by the end of April. It can be done sooner and we would welcome it but there has to be an ultimate deadline given also the extension period of 4 months.
On the basis of the request, the commitments by Greece, the advice from the institutions and our agreement, we will launch the national procedures, as of next week - where needed, of course this is not valid for the all countries - for the extension of the current programme. This will enable the EFSF Board of Directors to formally approve the extension before the end of February.
Let me finally say that it is very important that the Greek authorities, together with the institutions, resume immediately the work that would allow for the successful conclusion of the review of the next couple of month.
To summarize let me say that I think this is a very positive outcome. It will allow us step by step to get the work that we have to do with Greeks to get back on track. Hopefully we can make a good start with that next week.