Olli REHN, Ecofin Press conference, 17 May 2011
We had a good exchange of views on the economic outlook based on the Commission's spring economic forecast, which confirms that the economic recovery in Europe is maintaining its momentum, despite vulnerabilities in financial markets and uncertainties in the external environment. Our main challenges now are to contain the sovereign debt crisis, and thus protect the ongoing recovery in the real economy, and improving employment.
The current stage of the crisis is severely intertwined combination of the sovereign debt crisis and fragilities in the banking sector and you cannot solve one without solving the other. The stress tests should identify any remaining pockets of vulnerability. Once identified, vulnerable banks must recapitalise themselves or be recapitalised and/or restructured. I insisted today that it is essential that we provide the solution at the same time, that we identify the problem, or even prior to. We need concrete and decisive actions, including the appropriate backstops in place, a timeline, figures and a monitoring process, by the time the results are published.
Concerning Greece, although the fiscal adjustment achieved is unprecedented (over 7% of GDP in one year, which is around €20 bn), it is now essential that the authorities step up the implementation of fiscal and structural reforms included in the programme. The GR Government has committed to take further measures of fiscal consolidation in the coming days in order to close the gaps and meet the fiscal targets especially for 2011, as well as for the next years. We also expect GR to start implementing the ambitious €50 bn privatization programme without delay. These privatizations can reduce public debt by over 20% of GDP by 2015 if fully implemented. It is a cornerstone of the recovery programme of Greece.
Once again I call on all political forces in Greece to put aside their disputes and endorse the main objectives and policies of the programme for the sake of the recovery of the country, for the sake of growth and employment.
The Commission staff, together with the ECB and the IMF, will continue its review mission in Athens. Decisive steps in the coming days by the Greek authorities are indispensable before the Eurogroup can look into possible further steps to ensure that Greece is on a sustainable path.