Eurogroup meeting: extracts from the press conference
Lieu: Luxembourg (town), Luxembourg - Council
End production: 20/06/2013 First transmission: 20/06/2013
On 20 June, Eurozone Finance Ministers gathered to discuss the Banking Union and the economic situation of Cyprus. Ministers agreed on a draft framework for bank recovery and resolution - a key element of the future banking union - in order to allow negotiations to start with the European Parliament. The Council will be called to agree a general approach on a draft directive establishing a framework for the recovery and resolution of credit institutions and investment firms. An agreement would enable the presidency to start negotiations with the European Parliament with the aim of adopting the directive at first reading. Regarding Cyprus, Eurogroup secured a 10-billion-euro bailout in April to avert bankruptcy. But Cypriot President Nicos Anastasiades has requested moderations so that the Bank of Cyprus - the country's largest lender - can be safeguarded. The eurozone's 17 ministers will discuss what their response should be
Only the original language version is authentic and it prevails in the event of its differing from the translated versions.
||Arrival of the speakers
||SOUNDBITE (in English) by Jeroen Dijsselbloem, President of the Eurogroup: We were briefed by the Troika institutions and Minister Georgiades on the state of play on the Cyprus financial sector including the progress with the resolution of bank of Cyprus and calibration of capital controls. A due diligence exercise conducted by independent auditors is now on their way on the bank of Cyprus. In order to better assess the situation after the extended bank holiday in the bail in, a new CEO and a new board have also been recently been appointed. Swift and determined progress on the part of the Cyprus authorities with the implementation of the financial sector strategy as agreed in the MoU is key to bringing the bank of Cyprus out of resolution and eventually lifting the capital controls out of pays that is optimal for economy.
||General view of the audience
||SOUNDBITE (in English) by Jeroen Dijsselbloem : The direct recapitalization instrument from the ESM. After several months of intensive preparation and discussion we reach political agreement today on the main features of the ESM direct recapitalization instruments. This instrument is one of the important building blocks of the banking union so I am very happy that we come to this agreement and let me highlight some of the important points. This instrument will help preserve stability of the Euro area and help removing the risk of contagion from the financial sector to the sovereign that is weakening the vicious circle between banks and sovereigns as call for by the Euro Summit last year. There will be clear eligibility criteria and a clear packing order for the instruments. In particular an appropriate level of bailing will be applied before the bank is recapitalized by the ESM in line with EU state of rules and applying the principles of the fourth coming bank recovery and resolution directives.
||SOUNDBITE ( in English) by Olli Rehn, Member of the EC in charge of Economic, Monetary Affairs and the Euro: Let me start by congratulating Latvia for the Eurogroup's endorsement of the Commission's and the ECB's convention support and the dispatch the way for Latvia for join the Euro area on the first of January of 2014. I want to welcome Latvia for its impressive economic turn around over the last couple of years and achieve the sustainable economic convergence with the Euro area.
||SOUNDBITE (in English) by Olli Rehn: This initiative has the potential to livery up to 100 billion Euros funding for the SME's, which will depend on a number of factors, not least the option selected, the scale of participation by member states and the response of the markets. I can also call for a very high level of ambition by the EU Member states in order to support this very important SME funding initiative.