Remarks by Jeroen Dijsselbloem at the press conference following the Eurogroup meeting of 8 December 2014

REMARKS

Brussels, 8 December 2014

Remarks by Jeroen Dijsselbloem at the press conference following the Eurogroup meeting of 8 December 2014

As you know this afternoon we had a regular Eurogroup meeting, at which we talked about the Greek adjustment programme, the post-programme surveillance for Ireland and Portugal and a number of other issues.

Post-programme countries: Portugal and Ireland

I would like to start with the two post-programme countries, Portugal and Ireland. I can be quite brief on that.

We were pleased to learn from the institutions that both counties are doing pretty well.

In Portugal market sentiment, economic and financial sector conditions have continued to improve. There are concerns about an apparent slowdown in the progress of fiscal consolidation and structural reforms, but the Portuguese government, the Portuguese minister was adamant in reaffirming the Portuguese commitment to correct the excessive deficit next year, in line with the EDP deadline, and to continue the reform agenda.

Ireland has made significant progress on several fronts: fiscal, financial and structural reforms, and these are reflected in Ireland's strong growth performance. At the same time challenges remain, in particular regarding fiscal consolidation, private sector debt reduction and the improving of bank profitability.

For both countries, we remain confident that they will keep up their exemplary good track records and continue implementing the necessary reform measures.

Growth, jobs and investment

We also talked about incentives to strengthen investment as well as structural reforms. More general discussion on how to strengthen our growth throughout the Eurozone, preparing for debates later, perhaps beginning of next year, on the 4 president's reports. They will work on the report for the European Council, to be more precise the Eurozone Summit, but also giving some political guidance to the work of the Commission regarding flexibility.

We all agreed on the importance of the policy consideration at the current juncture. We had an exchange of views on the possibility of incentivising the implementation of key structural reforms, a very interesting debate on how we can strengthen and support each other in pushing forward structural reforms. There are many ways to incentivize structural reforms in the short run, within our existing framework. There are also long term ways to do it. Some would even require Treaty

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changes, but that would be for far away future perhaps. At this stage, it could be recalled that it was only an exploratory discussion. More reflection is needed on the operationalization of how to get structural reforms higher on our agenda.

It has been a useful debate guiding the work on the forthcoming 4 president's report and we will come back to it at the beginning of next year.

Greece

Let me turn to Greece. We have issued a statement, which outlines the main conclusions reached today. I'll highlight the key aspects.

Today, we were informed by the Troika institutions that since our November Eurogroup meeting, some progress has been made by the Greek authorities in order to address the outstanding issues to conclude the current 5th review. Despite this progress, there is not enough basis at this point to conclude the review now or before the end of the year.

Given these developments, and taking into account the time needed to fully finalise the current review, including the implementation of possible prior actions, relevant national procedures etc., we have concluded that the Eurogroup would be favourably disposed to a request by Greece for a technical extension of 2 months of the current EFSF program. Such an extension would allow for a possibility to conclude the fifth review in early 2015, which would then pave the way for the corresponding disbursement of 1.8bn euro still reserved for this purpose in the EFSF.

To do so, we first asked the Troika institutions to prepare a factual report on the state of play in the current review by tomorrow. Then, we need to receive the request from the Greek authorities for this extension, which will include strong commitments with regards to implementation of the reforms already agreed under the current review. For this purpose we gave a mandate to the EWG to timely inform the Member States concerned in order for them to be able to launch the national procedures, on the basis of these 2 documents, the Troika report I just mentioned and the Greek request which will come in tomorrow. This will then enable the EFSF Board of Directors to formally approve the 2 month extension before the end of the year.

Against this background, we urged the Greek authorities to continue working closely with the Troika institutions on the outstanding issues. The mission should resume as soon as possible and be concluded in early 2015. It goes without saying that this is a precondition for further Eurogroup decisions on the outstanding final EFSF loan disbursement and decisions on any follow-up support.

That leads me to the future follow-up arrangements, which today we only briefly discussed. As already mentioned after our last meeting in November, we remain favourably disposed to granting Greece an ESM precautionary credit line, an ECCL, if Greece were to request it. However, this remains subject to the finalisation of the reform measures that are currently still pending, and the completion of relevant national procedures.

Finally, we were informed by the Troika institutions that it would be prudent to extend the availability of the EFSF funds in the HFSF buffer until the end of February 2015, in other words in parallel to the extension of the EFSF program. The Eurogroup today agreed to support such an extension and following a request by Greece, the EFSF will then make the necessary arrangements to formalise this extension before the end of the year.

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