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Speech: Vice-President Rehn's remarks at the ECOFIN press conference

Commission Européenne - SPEECH/13/190   05/03/2013

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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 ECOFIN press conference

ECOFIN Press Conference/Brussels

5 March 2013

Good afternoon ladies and gentlemen.

Let me begin by welcoming the Council’s unanimous approval today of the agreement on the Two-Pack. This marks another step towards the further reinforcement of economic governance in the euro area that these two Regulations represent. I hope that the European Parliament will complete the legislative process next week in Strasbourg with a strong vote in favour of these proposals, which are indeed the essential foundation for the next steps in rebuilding and reinforcing our economic and monetary union.

As Minister Noonan explained, we made a commitment to set up an expert group to study partial replacement of national issuance of public debt and the focus will be on studying the preconditions for a redemption fund and/or eurobills. This group will be shortly set up and will involve experts in economics, public finance, law, financial markets, debt management. It will have the deadline of end of March 2014.

Second, I am very pleased with the agreement today that the Troika should propose the best possible option for a potential adjustment of maturities for EFSF and EFSM loans for Portugal and Ireland, with a view to further supporting a successful exit from the programme and a sustainable return to full market financing. The Commission will work hard to facilitate a decision in April in Dublin on measures that will send a strong signal of confidence in both countries.

And you may also recall that there was welcome news at the end of last week as regards employment in Ireland, which was shown to have grown for two successive quarters for the first time since the beginning of the crisis. Of course we are well aware of the need of caution. Two quarters of job growth do not make an employment spring. But this still remains an encouraging sign that the growing market confidence in Ireland is starting to be reflected in an improvement in the real economy and in employment.

Third and finally, today we have seen another important development that is concerning Latvia's interest in joining the euro. It is worth recalling that less than one year ago the talk of the town was of Grexit, which is an ugly word for an uglier concept, namely the breakup of the euro area. Now those fears have virtually or completely disappeared thanks to determined policy action both by the European institutions, including the European Central Bank and by the eurozone member states, and we are now discussing instead both the deepening and widening of the economic and monetary union.

It is worth underlining also the progress that Latvia has made in getting its economy back on track following the deep economic crisis that hit the country in 2008. The EU-IMF-led financial assistance programme was successfully concluded a year ago in January 2012 and Latvia now shows the fastest rate of GDP growth in the EU, the second highest rate of export growth and steadily falling, if still too high, unemployment.

Supported by these achievements, Latvia has concluded that it is ready to request a convergence assessment with the aim of adopting the euro in January 2014, next year. The Commission will do its job and will make a thorough and objective assessment based on the Treaty, in line with equal treatment and without a bias in either direction. I would like to underline the importance of being well-prepared and committed to sound policies when applying to enter the euro area.

And in this regard, as I said last night we will do the assessment both concerning the five convergence criteria in the light of the Maastricht Treaty which are pretty much quantifiable, and also do a more qualitative analysis as regards the sustainability of economic development and the economic policy of Latvia. We will present this in the course of the coming spring, most likely in early June.


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