BRUSSELS (MNI) — The following is the full text of a statement
made by Eurozone finance ministers after their meeting Sunday in
Brussels:
“The Council and the Member States have decided today on a
comprehensive package of measures to preserve financial stability in
Europe, including a European Financial Stabilisation mechanism with a
total volume of up to E500 billion.
“In the wake of the crisis in Greece, the situation in financial
markets is fragile and there was a risk of contagion which we needed to
address. We have therefore taken the final steps of the support package
for Greece, the establishment of a European stabilisation mechanism and
a strong commitment to accelerated fiscal consolidation, where
warranted.
“First, following the successful conclusion of procedures in euro
area Member States and the meeting of euro area Heads of State or
Government, the way has been cleared for the implementation of the
support package for Greece. The Commission has signed today, on behalf
of the euro area Member States, the loan agreement with Greece and the
first disbursement will proceed, as planned, before 19 May. The Council
strongly supports the ambitious and realistic consolidation and reform
programme of the Greek government.
“Second, the Council is strongly committed to ensure fiscal
sustainability and enhanced economic growth in all Member States and
therefore agrees that plans for fiscal consolidation and structural
reforms will be accelerated, where warranted. We therefore welcome and
strongly support the commitment of Portugal and Spain to take
significant additional consolidation measures in 2010 and 2011 and
present them to the 18 May ECOFIN Council. The adequacy of such measures
will be assessed by the Commission in June in the context of the
excessive deficit procedure. The Council also welcomes the commitment
to announce by the 18 May ECOFIN Council structural reform measures
aimed at enhancing growth performance and thus indirectly fiscal
sustainability henceforth.
“Third, we have decided to establish a European stabilisation
mechanism. The mechanism is based on Art. 122.2 of the Treaty and an
intergovernmental agreement of euro area Member States. Its activation
is subject to strong conditionality, in the context of a joint EU/IMF
support, and will be on terms and conditions similar to the IMF.
“Art 122.2 of the Treaty foresees financial support for Member
States in difficulties caused by exceptional circumstances beyond Member
States’ control. We are facing such exceptional circumstance today and
the mechanism will stay in place as long as needed to safeguard
financial stability.
“A volume of up to E60 billion is foreseen and activation is
subject to strong conditionality, in the context of a joint EU/IMF
support, and will be on terms and conditions similar to the IMF. The
mechanism will operate without prejudice to the existing facility
providing medium term financial assistance for non euro area Member
States’ balance of payments.
“In addition, euro area Member States stand ready to complement
such resources through a Special Purpose Vehicle that is guaranteed on a
pro rata basis by participating Member States in a coordinated manner
and that will expire after three years, respecting their national
constitutional requirements, up to a volume of E440 billion. The IMF
will participate in financing arrangements and is expected to provide at
least half as much as the EU contribution through its usual facilities
in line with the recent European programmes.
“At the same time, the EU will urgently start working on the
necessary reforms to complement the existing framework to ensure fiscal
sustainability in the euro area, notably based on the Commission
Communication to be adopted on 12 May 2010. We underline the importance
that we attach to strengthening fiscal discipline and establishing a
permanent crisis resolution framework.
“We underlined the need to make rapid progress on financial market
regulation and supervision, in particular with regard to derivative
markets and the role of rating agencies.
“Furthermore, we need to continue to work on other initiatives,
such as the stability fee, which aim at ensuring that the financial
sector shall in future bear its share of burden in case of a crisis,
also exploring the possibility of a global transaction tax. We also
agreed to speed up work on crisis management and resolution.
“We also reiterate the support of the euro area Member States to
the ECB in its action to ensure stability to the euro area.”
–Brussels: 0032 487 (0) 32 803 665, echarlton@marketnews.com
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