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Commission highlights priority actions for Greece to unlock growth and create jobs
The European Commission has announced a set of reforms for Greece that, if implemented, will permit the country to return to growth and create jobs, and will transform the country’s economy and institutions. After many months of crisis, the conditions now exist to start moving from crisis to growth in Greece. Agreement on the Second Economic Adjustment Programme and the successful conclusion of the debt reduction agreement with the private sector mean that all efforts can now be concentrated on much needed growth and jobs. The Communication from the Commission issued on 18 April highlights three broad areas for action by the Greek authorities during 2012: regaining control over public finances; assuring the flow of lending to the real economy by recapitalising the banks and helping SMEs to get affordable loans; and freeing business to drive growth. It also suggests how the Greek authorities can tackle the social impact of the crisis.
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The people of Greece do not stand alone in their efforts to return the country to growth and jobs. The EU and the wider international community have shown solidarity with the people of Greece on an unprecedented scale.
José Manuel Barroso, President of the European Commission |
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New EU measures present and identify key opportunities for job-rich recovery in the EU
With EU unemployment hitting record levels, on 18 April the European Commission announced a set of concrete measures to boost jobs. The proposal sets out ways for Member States to encourage hiring by lowering taxes on labour, offering hiring subsidies that create new jobs or supporting business start-ups more. It also identifies the areas with the biggest job potential for the future: the green economy, health services, and information and communications technology. The policy communication underlines the need for a strong employment and social dimension to EU governance and lays down ways to involve employers’ and workers’ representatives more in setting EU priorities. The package will be discussed at a high-level employment conference on 6-7 September to further mobilise all partners to implement the measures announced.
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EU places EUR 1.8 billion 26-year bond for Portugal
On 17 April, the European Union (EU) successfully placed a EUR 1.8 billion bond with a maturity of 26 years. The operation met with widespread investor demand. The proceeds will be lent on to Portugal following successful conclusion of the third programme review, as part the financial assistance package agreed upon in May 2011. The transaction was carried out by the European Commission on behalf of the EU under the auspices of the European Financial Stabilisation Mechanism (EFSM). The bond is the third long-term bond successfully placed in 2012, following the placement of bonds with 30-year and 20-year maturities in January and February. It further extends the average maturity of the EU loans to Portugal, up to a maximum average of 12.5 years.
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Formal report based on third review mission confirms Portuguese programme is on track
A formal report issued by the European Commission confirms the assessment of compliance and findings previously reported on 28 February by a joint mission to Greece. Staff teams from the European Commission (EC), European Central Bank (ECB) and International Monetary Fund (IMF) met with the Portuguese authorities in Lisbon from 15-27 February 2012 for the third quarterly review of Portugal’s economic programme. The report confirms the mission’s finding that the programme is on track and that the fiscal adjustment in 2011-2012 has been achieved. This allows the disbursement of some EUR 14.9 billion (EUR 9.7 billion by the EU and around EUR 5.2 billion by the IMF) in April/May 2012.
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EU Regulation on Statistics to strengthen independence and reliability
Complementing the rules on EU economic governance the European Commission adopted a further proposal on 17 April for stronger measures to ensure the quality and credibility of EU statistics. High-quality, reliable statistics are essential for evidence-based decision-making and demands for such data have increased in light of the enhanced economic-policy coordination that has been agreed upon in the EU over the past year. Moreover, recent economic events have shown the importance of credible statistics in ensuring the trust of the public and the financial markets in such decisions. The proposal would enhance the independence of National Statistical Institutes and require Member States to sign “Commitments of Confidence”, confirming at the highest political level their obligation to fully respect the European Statistics Code of Practice.
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Euro area finance ministers bolster firewall to EUR 800 billion
At their meeting on 30 March, euro area finance ministers agreed to raise the ceiling for combined European Stability Mechanism (ESM) and European Financial Stability Facility (EFSF) lending to EUR 700 billion. Including the EUR 49 billion from the European Financial Stabilisation Mechanism (EFSM) and EUR 53 billion from the bilateral Greek loan facility that have already been paid out to support current programme countries, the euro area is thus mobilising a firewall of approximately EUR 800 billion, or more than USD 1 trillion. The finance ministers also have committed to provide EUR 150 billion in additional bilateral contributions to the IMF and to make the paid-in capital of the ESM available more quickly than initially foreseen in the ESM Treaty. The ESM will be the main instrument to finance potential new programmes from July 2012.
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Further EU actions to combat money laundering
On 11 April, the European Commission adopted a report on the application of the Third Anti-Money Laundering Directive. The Directive, which has been in force since 2005, seeks to combat money laundering and terrorist financing, and thereby protect the soundness, integrity and stability of the financial system. The threats associated with money laundering and terrorist financing are constantly evolving, which requires periodic revision of the legal framework. The Commission report concludes that although the existing framework appears to work well and that no fundamental shortcomings have been identified which would require substantial changes, some modifications are necessary to adapt to the evolving threats posed. The Commission plans to bring forward a proposal for a fourth anti-money laundering Directive in autumn 2012.
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Directorate-General for Economic and Financial Affairs |
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