Brussels, 4 December 2012
Vice-President Rehn's remarks at the ECOFIN Press Conference
Good afternoon. As Finance Minister Shiarly said, today’s ECOFIN addressed several important issues and I will refer to two of them, two proposals that are of fundamental relevance to our efforts to restore confidence and to lay the foundations for a deep and genuine EMU.
First, ministers concurred that an agreement on the so-called two-pack to reinforce further economic governance is very close. These two Regulations will be essential foundations of the rebuilding of EMU, as explained in the Blueprint presented by the Commission last week. Their adoption will be a vital step towards a more integrated budgetary framework, with stronger policy coordination and further sharing of fiscal sovereignty. The Commission will continue to work tirelessly for a final agreement, and I want to encourage both the Council and the European Parliament to do everything possible to put in place these building blocks for the deep and genuine economic and monetary union that we want to construct together.
Second, there was good progress in the discussion concerning the Single Supervisory Mechanism for euro area banks, which will now be taken forward when the ECOFIN reconvenes next Wednesday. In the absence of my colleague Michel Barnier, let me say that the Commission considers that all the elements for an agreement are to be found in the Presidency compromise and in the report of the Parliament's Economic and Monetary Affairs Committee. The Single Supervisory Mechanism will be the cornerstone of a full banking union, which in turn is a key part of a stronger Economic and Monetary Union. That’s why it is of paramount importance that an agreement is reached by the end of the year. This is indeed a test that Europe cannot afford to fail – and one that Europe must be more than capable of passing.
Let me also underline that the rebuilding of EMU is certainly not an abstract concept – on the contrary, restoring confidence in the sustainability of the euro area has a very direct bearing on investors’ perceptions, and thus on growth and jobs. The dwindling numbers of those who still believe in the reversibility of the euro, along with the steady easing of market tensions since the summer, testify to the impact of the policy decisions Europe has taken in the last couple of months.
There is, of course, no room for complacency. Our economy remains in recession; 25 million unemployed Europeans is something that is absolutely unacceptable.
And in that context, today I briefly presented the Commission’s Annual Growth Survey, which focuses on the priorities to kick-start growth and investment.
Let me conclude with fiscal policy and public finances. As Vassos Shiarly said, we discussed the fiscal policy stance and the excessive deficit procedures. The Commission has made some proposals which the Council has decided upon today.
First, Malta has corrected its excessive deficit in a sustainable way. Therefore, the Council has agreed with the Commission that Malta can be taken out of the Excessive Deficit Procedure (EDP).
Following the package of structural reforms and fiscal adjustment by Greece, and with fiscal policy being on track, our proposal for a two-year extension to 2016 was adopted today by the ECOFIN Council.
This brings us to 20 countries being in the EDP and 7 being outside of it. Last year, we had 24 in the EDP and 3 out of the EDP. This makes my life a bit harder as I have to start remembering a longer list of Member States' names by heart. We already have 7 Member States outside the EDP.
This is a reflection that excessive deficits in the European Union are being reduced and, thus, our public finances are getting under control and becoming more sustainable in the European Union.
We had fiscal deficits in Europe on average around 6% of GDP in 2009 and 2010. This year, we will have a fiscal deficit of around, or slightly above, 3%. For next year, in 2013, our forecast is around 2.5%.
So the trend is positive. Public finances are getting under control and we expect that the level of public debt will peak and stabilise in the course of next year.