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  • 07/11/2016
  • 21:10
  • Statements and remarks
  • 636/16
  • Economy & finance
  • Euro area

Good evening and welcome to the press conference of the November Eurogroup. 

We had a number of different topics, I will just take you through the main issues. We have spent quite some time on the banking sector in Europe, in particular the banking union. We welcomed Danièle Nouy, who is the chair of the ECB Supervisory Board, as you know, and we welcomed Elke König, who is the chair of the Single Resolution Board. They both gave us an update on their work, recent developments in the banking union and the key challenges and priorities for both institutions in the coming months. It was good to hear also from them that the sector, across the board, is in better shape than years ago. Of course there are legacy issues in a number of sectors and institutions which have to be addressed, which are being addressed, but which should not undermine the confidence in the system as a whole as it improves the quality of its standards. We have built a solid banking union framework, we have our rules and we'll use them as agreed and when and where necessary. And of course clear communication on the work going forward is essential. Overall, we commended both institutions for the excellent work that they have been doing so far and the efficient functioning of the banking union. We look forward to talking to them in the Eurogroup again at the beginning of the spring next year. 

Secondly, we got a debrief from the post-programme surveillance in Cyprus and Spain. Regarding Cyprus, we welcomed the positive reports on strong economic recovery, 2.5%-3% economic growth. Good work done by the Cypriot authorities, including in the financial sector. We also took note of the still very high stock of NPLs and the possible risk to the fiscal outlook. We trust that the Cypriot authorities will continue their vigorous efforts to tackle these issues and to keep up the structural reform effort. Under this item, the Eurogroup was also informed by the Cypriot minister about the state of play regarding the possible reunification of Cyprus, with particular attention to economic and financial issues, some of which are of course also relevant for us members of the euro area. We learned about the positive economic effects this process may have, but also realised that adequate and effective preparation, in view of the ground that remains to be covered, is very important. There is a lot of work ahead of us, if and when that process becomes successful in the coming months. We will come back to that topic in a timely manner. 

On Spain, we were briefly informed by the institutions on the outcome of the review mission to Spain, which was limited in scope. Of course we were pleased to learn that Spain has now again a new and effective government. We congratulated Luis de Guindos on his new term. The debrief from the institutions showed on-going strong economic recovery in Spain and stabilisation of the financial sector. We had some discussion on whether the on-going economic recovery was due to the fact that Spain did not have a government. Now it once again has a government. Nonetheless it was good news and we congratulated Luis de Guindos on that. Of course some challenges still remain, not the least with regard to the consolidation of public finances, but we will come back to that later. 

We also returned to the subject of national insolvency frameworks. We have had that discussion a couple of times in the Eurogroup. We got more information from the Commission on where countries stand, on what good experiences there are, what the key factors are. Progress on the front of national insolvency frameworks is crucial for the economic recovery and financial integration within the euro area. We also heard from Danièle Nouy, from the banking supervision, on this topic. They of course have a lot of insight on the practice of legal frameworks related to NPLs. We will return to the topic in the first half of next year, as soon as we have findings from ongoing Commission initiatives to improve data availability in this area, and the Commission will, already in the short term I believe, come forward with a legislative proposal so we can make more progress on this important topic for the Eurozone. 

Then Greece. We briefly took stock of the current situation. The second review is ongoing as you know, cooperation between institutions and the Greek authorities is reported to be fruitful. Progress is being made. Obviously it's in everyone's interest to finalise the second review as soon as possible. At the next meeting of the Eurogroup we will spend more time on Greece. This will be on the 5 December, when we will know more about the work the ESM is doing on the possible debt relief measures for the short term. We will hear more from the ongoing 2nd review to get more sense of some of the important reforms that are part of that. Labour market reform, social system reform, the fiscal trajectory for the coming years, particularly the next years budget and the 2018 budget. All of those works strands will come together at the beginning of December and we will spend some time on that. Of course, with a view on the IMF going to the board before the end of the year which, Poul Thomsen reconfirmed today at the meeting, is still their strong intention. 

We were also debriefed on the state of play on technical assistance to Greece, but I will leave that up to Pierre if he wishes to say more. It was a positive report and we are very grateful to the Commission and the staff of the Commission for all the work done in collaboration with member states. 

Finally, Commissioner Moscovici debriefed us on the ongoing process with the draft budgetary plans. The Commission's opinion will come out on the 16th I believe and then we will have that also on our agenda on the 5 December. We will make an early start in the morning. First we will spend time on the DBPs, then have a short break and in the afternoon continue with our regular meeting on a number of topics, one of which will be Greece as I have mentioned.