The Government of India, the Government of Uttarakhand and the World Bank Board signed here today in New Delhi, a $120 million Loan Agreement which will help increase access to improved wa
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The Eurogroup welcomes the implementation of almost all of the agreed prior actions for the third review, following the staff level agreement on the policy package that was presented to the 4 December Eurogroup. Notably, the Greek authorities have adopted the 2018 State Budget which is compliant with the agreed primary surplus target of 3.5% of GDP. Moreover, the European institutions’ compliance report shows that the Greek authorities have over-achieved the fiscal targets set over the last three years (2015-2017). The Greek authorities have also continued to strengthen tax collection through the Independent Authority of Public Revenue and enhanced the fairness and effectiveness of the social welfare system. The business environment has been improved by further actions aimed at opening up regulated professions, improving the investment licensing system, lifting regulations that unnecessarily restrict competition in product markets as well as the opening-up the energy markets. Progress in the framework supporting NPL resolution was achieved through further actions related to the effective operationalization of the out-of-court workout scheme and the start-up of electronic auctions.
The Eurogroup reconfirms the importance of an ambitious comprehensive growth strategy with strong ownership from the Greek authorities. The authorities are invited to finalize it in cooperation with the institutions well before the end of the programme.
The Eurogroup calls on the Greek authorities to complete the outstanding prior actions as a matter of urgency. The Eurogroup mandates the EWG to verify the full implementation of the outstanding prior actions on the basis of an assessment by the European institutions. This will include an assessment to confirm that a continuous and unimpeded flow of electronic auctions is ensured as well as the completion of government pending actions in the field of privatization.
Following the full implementation of the prior actions and subject to the completion of national procedures, the ESM governing bodies are expected to endorse the supplemental MoU and approve the disbursement of the fourth tranche of the ESM programme. The fourth tranche under the ESM programme amounting to EUR 6.7 bn will be disbursed to Greece in two disbursements, starting with a first disbursement in February of EUR 5.7 bn to cover debt servicing needs, to allow the further clearance of arrears and to support the build-up of the cash buffer of the Greek State, in order to support Greece’s return to the market. The subsequent disbursement for arrears clearance may be approved by the EWG in Spring, subject to a positive reporting by the European Institutions on the clearance of net arrears using also own resources and a confirmation from the European institutions that the unimpeded flow of e-auctions has continued.
The Eurogroup will now turn its attention to the final stages of the ESM programme, which is expected to end in August 2018. The Eurogroup confirms the start of the technical work by the EWG on the growth-adjustment mechanism, as part of the medium-term debt relief measures to be implemented, if needed, following the successful conclusion of the programme, in line with the agreement in the Eurogroup of 15 June 2017. The Eurogroup invites the European institutions and the IMF to take into account the holistic Greek growth strategy when updating the DSA.
Good afternoon everyone.
This was my first meeting in my new role as Eurogroup President. It was also the first meeting for Hartwig Löger, the new Austrian minister, whom we welcomed. By contrast, it was the last meeting for Thomas Wieser, as chair of the Eurogroup Working Group. It was a special moment. We thanked him for his enormous contribution at a crucial period for our currency union.
Today, we also confirmed his successor, Hans Vijlbrief, who will start on 1 February. Hans and I go way back, he is very experienced and I am sure he will do a great job.
Still on appointments: I also launched today the call for candidates for the upcoming ECB Vice President vacancy, to ensure a smooth succession of Vitor Constâncio, whose term ends on 31 May.
Now a few words on our discussions. Today we covered Greece, Portugal, the euro area economy and follow-up to the December euro summit. Let me highlight a few key points.
On Greece, there are good news. We have achieved a political agreement on the third review of the ESM programme. We welcomed the adoption of nearly all agreed prior actions and mandated the EWG to check the completion of the remaining ones in the coming weeks. This reflects the huge efforts and excellent cooperation between the Greek government and the institutions.
The next disbursement will amount to 6.7 billion euros to cover debt service, arrears clearance and to support Greece’s cash buffer – this is critical to ensure full market access.
Looking ahead, we can start with technical work on debt relief measures, in particular we will look into a mechanism that will link debt relief to growth developments. This is in line with the Eurogroup statement of June 2017. At the same time, a sizeable primary surplus and reform momentum must stay on and outlive the programme in order to unlock growth potential and regain investors’ confidence. A holistic growth strategy will also be instrumental to this effect. We look forward to see it because we know from experience that ownership of the reform process during and after the programme is critical.
On the euro area economy, the IMF presented their article IV report. There are good news again: it shows how the economic situation has improved significantly with solid growth and job creation in virtually all euro area countries; it is a good time to make our economies more resilient.
With this in mind, we discussed policy priorities for the euro area in 2018. We agreed on five recommendations for the euro area focussing on growth and jobs, fiscal issues, labour market functioning, the financial sector and the euro area architecture.
On reforming the euro area, we discussed the guidance from the December euro area summit. There is strong interest in further developing the Banking Union and the ESM. Some Ministers also argued in favour of exploring other issues, such as fiscal capacity and improved fiscal rules. I’m convinced that sequencing will also help to bring all views on board.
In terms of process, our discussions over the coming months will then feed into the March and June summits. Non-euro area countries will be included in our debates.
After our meeting today, I sense a strong team spirit and common purpose. I will do my best to help deliver the changes that will make the Euro area stronger. I will also do my best in explaining to our citizens the benefits of these reforms.
The Eurogroup today appointed Hans Vijlbrief as the new President of the Eurogroup working group (EWG).
He will take office as of 1 February 2018 and will serve a two-year term. He will succeed Thomas Wieser who was the first full-time EFC/EWG president and held the position since 2012.
The President of the Eurogroup Working Group is elected by its members and then appointed by the Eurogroup. He was elected to this position by the EWG on 15 December 2017. The office of the President of the EWG is located at the General Secretariat of the Council of the EU, in Brussels.
The EWG prepares the meetings of the Eurogroup and coordinates on euro-area specific matters. It is composed of representatives of the euro-area member states of the Economic and Financial Committee, the European Commission and the European Central Bank.
Hans Vijlbrief will also serve as the President of the Economic and Financial Committee, which prepares the ECOFIN Council and promotes policy coordination among EU member states. He was elected to this position by the EFC on 15 December 2017.
Until now, Hans Vijlbrief has held numerous positions at the ministry of economic affairs and at the ministry of finance of the Netherlands. Since October 2012, he has been serving as treasurer general at the ministry of finance of the Netherlands and a principal adviser to the minister of finance of the Netherlands on Eurogroup matters.
Commissioner Margrethe Vestager, in charge of competition policy, said: “The Croatian State guarantee will help the Uljanik shipyard to continue operating and maintain 1 800 jobs, while they work out a sound restructuring strategy to ensure its future. We approved it today. The restructuring plan must return the company to long-term viability without continued public support, to preserve jobs in Istria on a sustainable basis.”
On 15 January 2018, Croatia completed its notification to the Commission of plans to grant a State guarantee on a €96 million loan in favour of Uljanik Shipyard. The company, part of the Uljanik group, is located in Pula, in the county of Istria in Croatia, and employs around 1 800 people. It has been in financial difficulties for several years due to the adverse effects of the financial crisis on the shipbuilding sector in general, and on the resulting low orders for new vessels in particular.
The measure will enable Uljanik Shipyard to pay wages, suppliers and other urgent liabilities over the next months and prevent it from going out of business, while preparing a restructuring plan.
The Commission’s rescue and restructuring guidelines allow Member States to support companies in difficulty, provided, in particular, that the public measures are limited in time and scope and contribute to an objective of common interest.
The Commission found that the aid is necessary to prevent Uljanik from going out of business immediately and avoid significant job losses. Moreover, the company’s liquidity needs over the next months are based on reasonable assumptions and will be monitored by an independent auditor on the basis of weekly liquidity plans. Finally, Croatia committed to notify a restructuring plan for the company within a maximum of six months.
The Commission therefore concluded that the measure will help preserving jobs in the region of Adriatic Croatia, where unemployment is significantly higher than the EU average. At the same time, the strict conditions attached to the use of the funds procured through the State guarantee and the short duration of the measure will reduce the distortion of competition potentially triggered by the State support to a minimum.
More information will be available on the Commission’s competition website, in the public State Aid Register under the case number SA.49619.