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European Commission

Olli REHN

Vice-President of the European Commission and member of the Commission responsible for Economic and Monetary Affairs and the Euro

Vice-President Rehn's remarks at the Eurogroup Press Conference

Eurogroup Press Conference - Nicosia

14 September 2012

Thank you Jean-Claude and good afternoon to everybody. Let me start by saying this has been a very good week for Europe.

The ruling of the Constitutional Court in Germany opens the way for the ESM to become operational shortly. That is nine months earlier than was initially envisaged.

The presentation of the European Commission’s proposal on a Single Supervisory Mechanism for euro area banks marks a further important step towards stronger and more integrated supervision for banks in the euro area and beyond.

And President Barroso’s State of the Union speech on Wednesday showed that we are both willing and able to think bold thoughts about the future of the European Union and over the euro area.

Better still, all of this comes in a time of encouraging signs of stabilisation. One key reason for this has been the impact of the announcement by the European Central Bank of its readiness to undertake Outright Monetary Transactions to help repair monetary transmission in the euro area and in so doing, safeguard financial stability.

Of course, there is no silver bullet, no single issue that can solve this crisis. Instead, it needs consistent and determined action from both the individual member states and the euro area in its integrity to facilitate further rebalancing of the euro area economy.

There is no more room for complacency today than there was six months ago. But we are, I believe, moving in the right direction.

It is indeed crucial that every individual Member State continues with the hard work of structural reform and fiscal consolidation, in line with their specific needs and challenges as well as with the Country Specific Recommendations.

There is in fact a wave of reforms going on all over Europe. For instance in Italy and Spain very determined action is being taken. Concerning Spain, because, I have personally followed it very closely in the last few days, weeks and months and today in the eurogroup meeting we discussed it, maybe a few points:

The financial sector programme of restructuring and recapitalisation of banks is fully on track. By the end of this month, September, we will have the results of the bank-by-bank stress tests, which will then provide a clear view of each bank’s capital needs. Next, we will see the completion of the legislative framework for strengthened regulation and supervision of the Spanish banking sector and we will see the submission of restructuring plans to the Commission concerning the banks that have to be restructured and re-capitalised.

I think that it is important not to lose sight of the essential objectives: an effective supervised and healthy responsible banking sector is needed in Spain in order to restore the conditions for sustainable growth and jobs creation.

On fiscal policy and structural reforms, it is essential to maintain the momentum in Spain. Minister Luis de Guindos today expressed very clearly that Spain is ready to take the necessary actions to meet the fiscal targets which are certainly within reach and Minister de Guindos also informed the eurogroup today that the Spanish government intends to adopt a national reform programme by the end of September based on the recommendations of the European Union with very clear commitments and a precise timetable.

I will conclude here. Thank you


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