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Remarks by President Centeno following the Eurogroup meeting of 24 May 2018

Met dank overgenomen van Eurogroep, gepubliceerd op donderdag 24 mei 2018.

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Luis Rego

Eurogroup President Spokesperson

+352621136935

Good evening. We had a long meeting today.

On Greece, we’ve heard some good news from the institutions. They have reached a staff-level agreement with the Greek government in Athens last week. We welcomed this package. It goes to show that when there is mutual trust and true ownership of reforms we can reach compromises in a short period of time. We encouraged the Greek government to keep the pace and implement these reforms swiftly before our June meeting. That is a crucial element for the conclusion of the programme.

We also held an initial exchange of views on a package of debt relief measures to be implemented at the end of the programme, conditional upon its successful implementation and to the extent necessary.

Our common goal is to ensure the long term sustainability of the Greek debt. To that end, we have mandated the institutions to produce a final Debt Sustainability Analysis - on which we can fine-tune possible debt measures. All this, within the boundaries defined in June last year and approved by the Eurogroup.

We have mandated our deputies to flesh out further all the loose ends of the Greek package. At our next meeting - in Luxembourg in June - we will decide on all that is needed to ensure a successful exit of Greece from the program by August. This is our top priority regarding Greece.

Overall, we have an staff level agreement approved, there is some convergence on the debt discussions at technical level, Greece tabled a long term growth strategy and it is over-performing on fiscal targets.

Pieces are falling into place, but we have an ambitious timeline ahead of us. I see commitment on all sides so I'm confident that we'll make it.

After Greece, we discussed the developments of the euro area economy. Growth and employment both picked up strongly in 2017 - right across the euro area - and this also helped to keep deficits down. The Commission’s Spring Forecast shows growth will remain broad-based in 2018 and 2019. There are, however, substantial risks to this outlook, mainly coming from outside the euro area. In particular, the policy stance of the US administration is a matter of concern. In times like these, prudent domestic policies are essential and so is close co-ordination at the European level.

We continued with a discussion on national budget spending reviews. Two years ago, the Eurogroup adopted a set of common principles and we come back to these regularly. Eurogroup Ministers are very interested in these discussions on spending reviews as they are important tools to improve the quality of public finances. They can be used to generate savings in difficult times and improve the quality and composition of expenditure in good times. Today, we focused on how to best ensure ownership. I asked the Spanish and Irish ministers to share their own experiences. We agreed that political commitment at the highest level throughout the duration of the expenditure review is critical. We will take this discussion further in one of our meetings next year.

Finally, we welcomed non-euro area member states in the room to discuss with us the completion of Banking Union and the future role of the European Stability Mechanism. This is part of our preparations for the June European Council discussions on deepening of the Economic and Monetary Union.

On the Banking Union, we had a good discussion on the sequencing of the deliverables , both in terms of risk reduction and risk sharing. The Banking package, which will be discussed tomorrow at the Ecofin, is an important part of this. This should pave the way for a decision on the ESM becoming the backstop to the Single resolution fund.

We also had a good discussion on indicators to assess the progress made with further reducing risks in the financial sector.

The institutions will provide an updated assessment of progress made with the reducing risks in the Banking Union in June. This will give us a clear and objective picture of where we are on risk reduction and that will inform our decisions. It is my intention to have these updates on a regular basis.

On the reform of the ESM, we took stock of progress made at technical level on all strands of this reform. That includes: the cooperation between the Commission and the ESM in future programmes; the review of the ESM toolkit; debt sustainability issues; and the common backstop to the Single Resolution Fund.

An agreement on these interconnected elements is within reach for June. There is still work to be done but I am confident that we will be able to agree on important policy guidance and decisions in June. Decisions that will make the euro area more robust.

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