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Statement by Vice-President Rehn at the Eurogroup

21.02.2012 - Mr Rehn described the agreement as "an essential step further for Greece and for the euro area as a whole"

In the past two years and then this night, I have learned that marathon is indeed a Greek word.  But in the end we came to an agreement.  It is a far reaching and important agreement and the Commission welcomes this agreement tonight which will substantially reduce the debt burden of Greece and will help to reform the economy and administration so as to return to growth and creating jobs.

It is an essential step further for Greece and for the euro area as a whole, and this programme is supported by a very substantial contribution by the private sector as Jean-Claude Juncker explained.  This includes a haircut of 53.5% and there are several elements of the PSI which will reduce the Greek public debt to the level of 120.5% of GDP by 2020.  In order to reach this level and to ensure that the financing of the official sector is limited to 130 billion euro during the programme period, we needed several hours of negotiations, and that was the main task of tonight obviously. 

The programme is based on rigorous conditionality which is strengthened by reinforced monitoring of the implementation of the programme through enhanced and permanent presence of the Commission's task force on the ground, supported by experts provided by member States.  In order to enhance the implementation of the programme, we also decided to create a segregated account through which Greece will pay an amount of the coming quarter's debt service which will certainly give strength to policy conditionality. 

We expect that this unprecedented solidarity of Greece's euro are partners is now matched with a strong commitment by the Greek political leaders to fully implement the programme first and foremost for the benefit of their fellow citizens.  It is clear that the Greek economy cannot rely any more on a large public administration financed by cheap debt  but rather it needs to lean on investment, Greek and foreign, to facilitate new growth and creation of jobs.  For this to happen, conditions for investment need to be created and improved.  How will that happen, for instance, through an efficient and fair tax system, effective public administration, more favourable business climate, the full use of available structural funds and by allowing unit labour costs to adjust. 

So all in all, today's deal is a key remaining building block of our comprehensive crisis response and with this agreement we have a real chance to turn the corner and move from stabilisation to boosting sustainable growth and job creation. 


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