Local view for "http://purl.org/linkedpolitics/eu/plenary/2010-02-09-Speech-2-197"
| Predicate | Value (sorted: default) |
|---|---|
| rdf:type | |
| dcterms:Date | |
| dcterms:Is Part Of | |
| dcterms:Language | |
| lpv:document identification number |
"en.20100209.13.2-197"2
|
| lpv:hasSubsequent | |
| lpv:speaker | |
| lpv:spoken text |
"Madam President, the Commission is concerned about the substantial economic and fiscal challenges that Greece faces. The difficult situation in Greece is a matter of common concern for the euro area and for the EU as a whole, as large and persistent domestic external imbalances threaten the macro-financial stability of the country with a serious risk of spillovers into other parts of the euro area.
In conclusion, we are living in an unprecedented situation but we are facing it. Greece has adopted an ambitious programme to correct its deficit and to reform its public administration and its economy. It deserves support in this difficult task, and the Commission supports Greece. The integrated surveillance mechanism, together with the willingness of the authorities to tackle the problems, is the guardian of a successful implementation of fiscal consolidation measures and structural reforms that will put Greece back on a sustainable path. Timely and rigorous implementation of the budgetary measures and of structural reforms – and both fiscal measures and structural reforms are contained in the programme adopted in Greece by the Greek authorities – together with the tight monitoring of the situation, is the key to finding an adequate solution to the present tensions in our markets.
The Greek authorities and the Greek people are aware of the challenge in front of them. On 15 January, the government presented an ambitious stability programme intended to tackle these issues. The programme envisages a deficit reduction from an estimated 12.7% in 2009 to below 3% in 2012, starting with an adjustment of four points of GDP this year. This programme displays an appropriate degree of ambition given the sheer size of the consolidation needed and is a front-loaded programme. In more detail, the Greek authorities have announced a package of concrete measures for 2010. Some of these measures have already been submitted to the Greek Parliament and are to be implemented shortly. Plans for the later years of the programme are less detailed at this stage.
Last week, on 3 February, the Commission adopted an integrated approach and surveillance mechanism which combines our assessment of the stability programme, a recommendation on the excessive deficit procedure to bring the budget deficit below 3% in 2012, as the government established in the programme, and another recommendation using Article 121(4) of the EU Treaty for the first time to ensure that Greece’s economic policies are consistent with our broad economic policy guidelines and with the proper functioning of our Economic and Monetary Union. We have also started an infringement procedure to ensure that Greece addresses the problems that have prevented the reporting of reliable budgetary statistics until now and the Commission announced its immediate initiative on audit powers for Eurostat.
As regards the stability programme, the Commission fully supports Greece in its efforts to redress a difficult economic and fiscal situation. The measures and policy intentions outlined in this programme are an important step in the right direction. The successful large government bond issue on 25 January seems to indicate that market participants share this view, albeit at a high interest premium, and increases in the spreads thereafter also show that they remain cautious.
However, there are risks to the programme targets and the medium-term fiscal adjustment. The macro-economic scenario outlined in the programme is rather optimistic and there is some uncertainty about the underlying revenue projections, especially the estimated impact of efforts to tackle tax evasion during an economic downturn. Given recent market developments, interest and expenditure projections also seem to be on the low side. As far as the recommendation on the excessive deficit procedure is concerned, our recommendations as regard measures to be taken this year rely fully on the measures announced by the Greek authorities in their stability programme. They include measures to be implemented in the first quarter of this year, such as wage bill cuts, reduction in public employment, progress with health care and pension reforms, tax and excise duties increases and tax administration reform. Some of the fiscal consolidation measures have already been submitted to the Greek Parliament and should be implemented shortly. The Greek authorities are invited by the Commission in our proposal to the Council to present by mid-March a detailed implementation report announcing adopted measures and the calendar of the announced measures. An evaluation of the risks should also be carried out so that, in case risks materialise, compensatory measures should be put in place as necessary.
In this context, the Commission welcomes the announcement on 2 February of further measures, notably a nominal public sector wage freeze and an increase in excise duties on fuels to safeguard the budgetary target for this year, as well as the Greek authorities’ readiness to adopt and swiftly implement additional measures if needed.
As regards the later years of the programme, we call for further adjustments of a permanent nature, continued tax administration reforms and an improvement in the budgetary framework. Obviously, Greece is also requested to further pursue efforts to improve the collection and processing of general government aid. Given that plans are less detailed, we propose setting up a tight reporting system in which the Greek authorities will report on a quarterly basis on measures implemented, results achieved and measures to be implemented. This tight reporting system will ensure that the plans will materialise as planned. We also adopted the recommendation to put an end to the inconsistency with the broad guidelines of the economic policies and the risks of jeopardising the proper functioning of economic and monetary union, given the continuous loss of competitiveness of the Greek economy, and the widening of external imbalances as well as by the large spread in financial markets vis-à-vis benchmark bonds.
Moreover, co-movements in spreads in other countries are also evidence of clear risks of spillovers to other Member States. In this context, Greece is expected to adopt a comprehensive structural reform programme aimed at increasing the effectiveness of the public administration, stepping up pension and health care reform, improving labour-market functioning and the effectiveness of the wage bargaining system, enhancing product market functioning and the business environment and maintaining banking and financial sector stability.
What are the next steps in this very detailed process of surveillance? Our recommendations will be discussed by the Eurogroup and Ecofin next week, and then a first report should come in mid-March elaborating on the calendar for implementation to safeguard the 2010 targets. Then, on a quarterly basis, starting in May, Greece should report on the way in which they are responding to the Council decision and recommendation. Each report will be subject to a Commission assessment. It is clear that, if there are signs that risks are materialising, additional measures would need to be implemented. Therefore, it is crucial that the Greek Government stands ready to adopt additional measures if necessary, as they have already indicated."@en1
|
| lpv:unclassifiedMetadata | |
| lpv:videoURI |
Named graphs describing this resource:
The resource appears as object in 2 triples