Thank you Mr President, Honourable Members,
As Mr Gualtieri just said, two weeks ago the Eurogroup reached an agreement on Greece setting out the path towards a significant disbursement and also identifying a package of debt measures.
This agreement was the result of months of hard work by all sides involved. The Commission has played its role faithfully to support the process.
Following the staff-level agreement, and actually the work has started already before, the Greek Parliament adopted a substantial package of reforms - indeed, very substantial package of reforms. According to the European Commission's forecast, it will allow Greece to reach its primary surplus target - 3.5% of GDP primary surplus by 2018. It also allows having a fiscal contingency mechanism and improving the functioning of the state and the economy.
Key elements are major reforms of pensions and taxation, measures to implement the strategy on addressing non-performing loans, strengthening the independence of revenue administration, setting up a new Privatisation Fund and opening the energy and gas markets.
The verification of all the Prior Actions is on-going as we speak, but we can already that there is important progress being made towards their finalisation. This should be done swiftly, as the compliance with all the Prior Actions is the first precondition for the disbursement.
The disbursement would be significant – EUR 10.3 billion. It would come in several tranches. It would also allow clearing at least part of the accumulated arrears.
The positive conclusion of the first review would also open the way for the debt measures:
The verification of all the Prior Actions is on-going as we speak, but we can already that there is important progress being made towards their finalisation. This should be done swiftly, as the compliance with all the Prior Actions is the first precondition for the disbursement.
The disbursement would be significant – EUR 10.3 billion. It would come in several tranches. It would also allow clearing at least part of the accumulated arrears.
The positive conclusion of the first review would also open the way for the debt measures:
- There are short-term debt measures related to debt management, and the ESM is looking at them as a matter of priority.- There are medium term measures upon successful implementation of the ESM programme, with the SMP and ANFA profits, early partial repayment of loans with available resources within current programme and, if necessary, some further EFSF loans re-profiling.
- And for the longer term, meaning after the end of ESM programme, a contingency mechanism to be activated by Eurogroup in case a more adverse scenario is materialised.
Based on the successful completion of the first review and the agreement on debt measures, the IMF management intends to recommend to its Board to approve an IMF financial arrangement this year.
We believe that reforms undertaken under the ESM programme will allow the Greek economy to recover, to regain financial stability, to regain economic growth and also to boost confidence of investors and citizens. But of course the legislation is only part of the work, what matters equally - if not more - is effective implementation [of reforms].
To address this challenge, Greece benefits from the technical support coordinated by the Structural Reform Support Service (SRSS) but, of course, the responsibility for the implementation at the end of the day rests with the national authorities.
The Greek Authorities can draw on technical assistance in almost all key areas of reform under the ESM programme.
Support is provided for the implementation of measures related to the revenue administration, justice, anti-corruption, business environment, privatisation, healthcare as well as central administration reform to quote some.
Experts are currently on the ground helping the Greek administration with - among other things - improving the business environment, for example, through the simplification of licensing, and improving tax collection.
Further technical assistance will be rolled out shortly in the area of labour markets, health, education, transports and export promotion.
It is important that Greece makes best use of the available European funds. To do so, the authorities need to speed up administrative and legal work to ensure that projects under the 2007-2013 envelope are completed timely with the national money by March 2017 and ensure that all the remaining ex-ante conditionalities for 2014-20 funds are in place by the regulatory deadline by the end of this year.
Finally, it is encouraging that last month the first Greek project – investment in innovative agri-food business Creta Farm – received funding from the European Investment Bank with the support of the European Fund for Structural Investment. It is a EUR 15 million EIB loan backed by EFSI guarantee.
We hope this is the first of many more projects to come in Greece.
I will stop here. I believe Pierre will provide you with more details on the implementation of the Greek programme.
Thank you.
