Local view for "http://purl.org/linkedpolitics/eu/plenary/2000-05-17-Speech-3-128"
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"en.20000517.7.3-128"2
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"Mr President, I would like to thank Mr Goebbels for his report and also the various participants in this debate. Today we are studying the report on convergence, which deals with the Swedish and Greek problems. With regard to Sweden, the situation has hardly changed since 1998. The economic situation is positive, but the legislative adaptation of its Central Bank is not being carried out and it is not a member of the Exchange Rate Mechanism of the EMS.
With regard to Greece, the situation is radically different. Greece did not fulfil the convergence criteria in 1998 but now it does. By that I mean that it fulfils them in the strictest sense, using exactly the same criteria as in 1998. Greece has clearly made a great effort and I therefore have nothing to add to the positive results highlighted by Mr Goebbels in his report.
I would like to talk about some of the points which have been mentioned today, given the concern about the Greek model. I understand that concern because Greece offers a precedent not only for the new candidate countries but also for the current Member States who, in the future, may join the single currency. In this respect, it is quite clear that the way we deal with Greece will be crucial but I want to insist that Greece has been treated in the same way as all the other countries when their situation was considered back in 1998.
There have basically been two issues of concern: debt and inflation. Are they sustainable? Is this inflation situation sustainable, or durable, as you call it? In the case of Greece, debt stands at more than 100% of GDP, practically the same as in Belgium or Italy. I do not think it is reasonable to compare the current situation in Greece with that prevailing in Italy or Belgium. We must not forget that Belgium and Italy have benefited from the fall in debt resulting from the reduction in interest rates, which is due, in particular, to the approximation of the interest rates of their Central Banks with those of the European Central Bank. In comparative terms, the Greek situation is similar to the Italian or Belgian situation at the time of their accession to the single currency.
The second point of concern is inflation. I understand this concern on the basis of two arguments: firstly, it is true that the level of inflation necessary to comply with the criteria was achieved relatively recently; secondly, there will also be a reduction in the interest rates and this will have a positive effect on speeding up the reduction in deficit and debt, but which may generate tensions in the market.
With regard to the first point, concerning whether Greece has achieved this inflation rate in a manner which is unsustainable, I must make a few comments. Greece has been complying with the inflation criteria for some months and the situation is improving considerably. This morning I had the opportunity to discuss the Greek figures which were issued a few days ago by the Greek national statistical service. The Eurostat figures were also published this morning. At the moment, the harmonised CPI, in the case of Greece, stands at 2.1%, a drop of 0.7% on the March figure; this is a better situation, for example, than certain countries of the monetary union, such as Belgium, Spain, Ireland, Italy, Luxembourg and Finland. In comparative terms, therefore, Greece’s current situation is quite sound.
If we abide by the strict criterion of the last 12 months, we will see that inflation currently stands at 2%. This is clearly better than the situation in Spain and Ireland, and practically the same as Italy, Luxembourg or the Netherlands. Therefore, in terms of figures, I believe that we should not worry about the Greek situation.
However, the Commission also shares the concern which certain MEPs have highlighted. We have therefore insisted on two points in discussing both the broad guidelines for economic policies and the convergence report. Greece has to do two things, and the Greek Government is prepared to do them and has committed itself to doing them: Firstly, it must continue with its liberalisation policies and structural reforms which will improve the inflation situation; secondly, Greece must continue with its policy of reducing the deficit, but in a context of combining policies, a ‘policy mix’, which will allow it, in the event that an increase in demand, resulting from a reduction in interest rates, may create tension in terms of inflation, to reconsider its tax policy so that it will not have negative effects on the process of integration into Monetary Union.
I am convinced that all of that will happen, and the Greek Government has committed itself to ensuring that it does. I therefore believe that the entry of Greece into the euro will help rather than hinder it. The euro has shown that it is still an attractive currency which some countries want to join. I hope that the path being taken by Greece will be followed by other Member States in the next few years. This is the end of a process. We must wait for its culmination with the decisions in June, but I am convinced that, by welcoming Greece into the euro when the time is right, we will generate more confidence in the face of any other type of arguments against the future progress of the single currency."@en1
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