Local view for "http://purl.org/linkedpolitics/eu/plenary/2011-05-11-Speech-3-559-000"
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"en.20110511.35.3-559-000"2
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"Mr President, I fully understand the significant interest in this Parliament in the actions being undertaken within the Union and beyond to tackle the challenges which some Member States are facing in relation to their public finances.
However, some specific challenges remain. Ireland will, in particular, need to stick to the powerful fiscal adjustment as well as ensure that its financial sector is on a stable footing for the future.
Second, Greece. Greece has come a long way since the very difficult situation last year, and its efforts should be commended. It has been faced with a daunting challenge and has demonstrated unwavering commitment and clarity of purpose. The adjustment programme is broadly on track. The latest implementation report, drafted jointly by the Commission, the IMF and the ECB in March, concluded that the programme has made further progress towards its objectives. Some of the reforms needed to deliver the programme’s medium-term objectives are being put in place. The report also identifies further areas where reforms are required in order to build the critical mass necessary to ensure fiscal sustainability and economic recovery. The Commission, the ECB and the IMF continue to monitor progress on the implementation of the adjustment programme closely. The next review is scheduled for this month.
The Member States participating in the bilateral loan agreed in March to reduce the interest rate by 1% and to extent the maturity of the loan. This is also a positive development. The technical details of the implementation of this agreement are currently under discussion.
Finally, Portugal. On 6 April, the Portuguese caretaker government announced its intention to seek financial assistance from the European Union. This followed a period of intense pressure from the financial markets. However, Portugal was also going through a period of political uncertainty which, as we know, led to the resignation of the government on 24 March. The Portuguese Parliament had previously rejected the new fiscal conciliation package proposed by the government. Negotiations between the Troika and the Portuguese authorities have now been finalised and the memorandum of understanding on the policy conditions attached to the financial assistance is being agreed.
The financial envelope will be around EUR 78 billion covering a three-year period. In line with recommendations by the Ecofin Ministers at the informal Ecofin in Budapest in April, the programme covers reform in a number of areas, including public finance, labour and product markets and the financial sector. We consider that such measures are essential for growth potential and increased economic stability. Endorsement of the final financial package is also expected at next week’s Ecofin Council.
This is only a brief overview of the measures being taken to address the impact of the global financial crisis on the EU and on three Member States in particular. As I said at the outset, the Hungarian Presidency is not directly involved in all of the detailed negotiations, some of which were more specifically within the remit of the Euro Group.
The Presidency is, however, committed to doing its part to assist in ensuring that all necessary measures are in place in order to address the current problems. We consider that this is essential if we are to boost Europe’s competitiveness in the longer term and, in so doing, deliver the strong role which Europe as a whole needs.
The global financial crisis has had a significant impact on both revenues and expenditure in all our countries, even if the extent and nature of that impact is not the same in all cases and the capacity of individual Member States to handle the consequences is also very different.
The first thing I would like to stress is that it is the Member States themselves which are, first and foremost, responsible for ensuring that their public finances are sustainable and on a sound footing. Similarly, it is for each one of them to ensure that their economies are competitive, flexible and resilient. Of course, that does not mean that public finances and economic performance are not also a matter of collective interest.
We are part of a Union, and our economies are interlinked in a number of ways: through the single market and, in many cases, through the sharing of the common currency and the deeper economic integration which that implies. More generally, we all have a commitment of solidarity towards each other, based on a desire to protect and promote the wider European interest. What that means is that we all want to see a stable and strong economy across the EU as a whole and, within it, of the euro area in particular. Where necessary, this has to involve taking steps to ensure the stability of individual Member States.
We have a number of tools at our disposal to do this. We have the coordination mechanism that seeks to ensure that appropriate economic and budgetary policies are pursued by each and every Member State. These are being updated and reinforced, and I am pleased that negotiations between the Council and Parliament are advancing well. We also have access to the European Financial Stabilisation Mechanism, which can offer support at EU level to any Member State, whether inside or outside the eurozone.
In addition, and for the eurozone countries specifically, further instruments have been set up and are continuing to be developed. Greece has received a package of coordinated bilateral loans from Member States as well as a loan from the IMF. Ireland has received a package consisting of bilateral loans, a loan from the European Financial Stability Facility (EFSF) and also a loan from the IMF. The support package for Portugal, which will also draw on both European and IMF support, is also being prepared.
Ministers of the eurozone Member States are also finalising the technical details of the European Stability Mechanism, which is due to take effect from 2013 as a permanent financial support mechanism to replace the European Financial Stability Facility. Non-eurozone Member States are also participating in this process.
I would now like to turn briefly to the situation in the three eurozone countries to which I have already referred. I should, however, mention that, from the outset, many of the issues in relation to these Member States are discussed outside the regular Ecofin format, reflecting their specific characteristics as members of the eurozone. The chair of the Euro Group would be better able than I to give you further details on many of these points.
First, Ireland. Following the agreement last December of an overall EUR 85 billion assistance programme for Ireland, the Irish authorities have undertaken a great deal of work to implement the adjustment programme to which the financial support was attached. This programme has been kept under constant review by the new government. The Ecofin Council will review compliance with the programme for the first quarter at its meeting on 17 May, next Tuesday. I cannot say much in advance about that discussion, but the overall assessment is likely to be that Ireland’s performance is in line with expectations."@en1
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