The economic crisis has prompted intense and sustained action by the EU's national governments, the European Central Bank and the Commission. All have been working closely together to support growth and employment, ensure financial stability, and put in place a better governance system for the future.
21 July 2011
The Heads of State or Government of the 17 euro-area countries announced a raft of measures designed to alleviate the Greek debt crisis and ensure the financial stability of the euro area as a whole. The summit in Brussels saw agreement on a new financial support programme for Greece worth some €109 billion, a voluntary contribution from the private sector estimated at a net effect of €37 billion, the extension of maturities, and lowering of lending rates. Revised EFSF lending rates and maturities will also be applied to Portugal and Ireland. The summit statement also covered improving the effectiveness of the current European Financial Stability Mechanism (EFSF) and of the future European Stability Mechanism (ESM), adhering to fiscal consolidation and growth in the euro area, and strengthening EU economic governance. Leaders notably called for the rapid finalisation of the legislative package on the strengthening of the Stability and Growth Pact and the EU’s new macroeconomic surveillance. Meanwhile, the fifth tranche (€12 billion, of which €3.3 billion paid out by the IMF) of the current Greek Loan Facility was fully disbursed on 15 July.
>> Statement by the Heads of State or Government of the euro area and EU institution, 21 July 2011.
>> Remarks by European Council President Van Rompuy
>> SPEECH 11/534 Statement by President Barroso following the meeting of Heads of State or Government of the euro area
>> MEMO 11/534. Statement by Commissioner Rehn on Euro Area Summit
>> The Institute of International Finance (IIF). Press release 21/7/2011. Greece Financing Offer: Statement by the IIF Board of Directors
11-12 July 2011
Euro-area finance ministers discussed the parameters of a potential new multi-annual economic adjustment and financial support programme for Greece. Calling on the Greek government to sustain its efforts to meet commitments regarding fiscal consolidation, structural reforms and privatisations, ministers said they “recognised the need for a broader and more forward-looking policy response to assist the government in its efforts to bolster debt sustainability and thereby safeguard financial stability in the euro area”. Ministers tasked the Eurogroup Working Group to propose measures to reinforce the policy response and they agreed to provide extended technical assistance to Greece. Euro–area ministers also signed the Treaty on the European Stability Mechanism (ESM) paving the way for the ESM to take over from the European Financial Stability Facility and the European Financial Stabilisation Mechanism in July 2013. The Economic and Financial Affairs Council (ECOFIN) on 12 July also adopted a decision, addressed to Greece, with a view to strengthening budgetary surveillance.
>> Council conclusions 12678/11
>> Council Decision addressed to Greece with a view to reinforcing and deepening fiscal surveillance and giving notice to Greece to take measures for the deficit reduction judged necessary to remedy the situation of excessive deficit. 12352/11
>> Statement by the Eurogroup, 11 July 2011.
"Yesterday, the Euro-area leaders took decisions that steer the euro-area out of the storm of the past few months. The choices made will bring important benefits for European citizens, for the stability of the euro-area and for the global economy."
President Barroso praised the outcome of the meeting, saying "I think that it is the first time since the beginning of this crisis that we can say that politics and the markets are coming together".
Tomorrow, 24 hours from now precisely, the Heads of State and Government of the Euro area will meet in Brussels to address the present challenges in the Euro area. Nobody should be under any illusion: The situation is very serious. It requires a response. Otherwise the negative consequences will be felt in all corners of Europe and beyond.
The EU-wide stress tests are more rigorous than those conducted previously. In particular, the definition of capital is stricter, the scenarios used are more severe, and for the first time, a thorough peer review exercise has been conducted to ensure coherence and consistency of results. We emphasise the full and detailed transparency attached to these tests, for example as regards sovereign exposures.
Staff teams from the European Commission, European Central Bank and the International Monetary Fund visited Dublin during July 6-14 for the regular quarterly review of the government’s economic programme. Their assessment is that the programme remains on track and is well financed.
Ministers reaffirmed their absolute commitment to safeguard financial stability in the euro area. To this end, Ministers stand ready to adopt further measures that will improve the euro area’s systemic capacity to resist contagion risk, including enhancing the flexibility and the scope of the EFSF, lengthening the maturities of the loans and lowering the interest rates, including through a collateral arrangement where appropriate. Proposals to this effect will be presented to Ministers shortly.
The Eurogroup meeting will start on Monday 11 July at 15h00. The European Commission will be represented by Economic and Monetary Affairs Commissioner Olli Rehn. A press conference is expected to take place after the meeting.
This issue of the Quarterly Report focuses on the EU's new integrated policy surveillance, which is centred upon the recently-completed European Semester.
The signing of the Treaty paves the way for the ESM to take over from the European Financial Stability Facility and the European Financial Stabilisation Mechanism in July 2013
A joint Commission / ECB / IMF mission met with the Greek authorities in Athens from 3 May to 2 June, and 21 to 23 June 2011. The mission assessed compliance with the terms and conditions of the Fourth Review under the Economic Adjustment Programme.