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Vice-President of the European Commission and member of the Commission responsible for Economic and Monetary Affairs and the Euro
Speaking points by VP Rehn at the Press Conference of the Informal meeting of the Eurogroup
Eurogroup Press Conference in Dublin
12 April 2013
Good afternoon. As you can see from the summary of the President of the Eurogroup, it was a busy but productive morning today. I will make three points on 3 key issues.
First, I want to welcome today’s political agreement reached on the Memorandum of Understanding on the Cyprus programme. The way is now open for the national approval procedures and I hope that it will be possible to successfully complete these procedures by the end of next week. That will allow for the signing of the Memorandum of Understanding and the effective start of the programme.
Negotiating this programme has been a long and very difficult process, as we all know. Now it is important that the decisions are implemented effectively, so that Cyprus can move forward.
On behalf of the Commission, I want to say again that we stand by the Cypriot people and we are committed to providing support and technical assistance to help Cyprus to get through the tough times and overcome the current difficulties.
Second, I want to welcome the agreement reached on the extension of the EFSF loan maturities for Ireland and Portugal. This is another very important step forward towards a sustained return to full market financing for both countries.
Of course, it is crucial that both Ireland and Portugal continue along the path of determined programme implementation. Because, ultimately, it is the combination of growth-enhancing structural reforms and consistent fiscal consolidation that will firmly re-establish investor confidence and ensure that the Irish and Portuguese people can put this very hard crisis behind them and move on to sustained growth and job creation.
I hope and trust that the Ecofin will this afternoon will take a similarly supportive decision for Ireland and Portugal when it comes to extending the maturities of loans under the European Financial Stability Mechanism, which is the Community instrument pairing the EFSF.
Last but not least, a word on Banking Union, which is essential to reverse the process of financial fragmentation in Europe and, thus, to preserve the integrity of the Single Market. It is also critical to ensure economic recovery and underpin the smooth functioning of the Economic and Monetary Union.
Banking Union will reinforce financial stability by assuring more uniform and high-quality arrangements for the supervision and resolution of banks. It will further reinforce financial stability by diluting the link between banks and their national sovereign.
Accordingly, the Commission believes that the timeline for establishing a Banking Union should be as short as possible. With the agreement on the Single Supervisory Mechanism, Europe has taken a large first step forward. We must now build on this progress and bring the elements together. To this end, the various legislative proposals from the Commission, including the proposed Directive on Bank Resolution and, in parallel, the proposal on ESM direct bank recapitalisation, should be adopted as rapidly as possible in line with the request of the Heads of State and Government.
The Banking Union is not created and completed overnight. But we must now have a clear perspective for the Banking Union and its elements with very a specific and clear timeline.
This is why the possibility for direct recapitalisation of banks by the ESM is also a necessary feature of Banking Union. And I am glad that the Eurogroup has taken yet another step closer today by moving forward to shortly, as the President of the Eurogroup said, by June, agreeing the guidelines for a direct recapitalisation instrument for the ESM, putting us on track for a decision on this key element of the Banking Union by June, as called for by the European Council.