European Union

Good evening everyone and welcome to this Eurogroup press conference.

Today, we had a lot of guests in our meeting: Danièle Nouy, the Chair of the ECB Banking Supervision; Elke König, Chair of the Single Resolution Board; Professor Niels Thygesen, Chair of the European Fiscal Board; Sharon Donnery, she is the deputy governor of the Bank of Ireland and chairs a working group on NPLs in the ECB. In addition to Commissioner Moscovici and Vice President Dombrovskis who join us on a regular basis, this time we also had the benefit of the company of Commissioner Vestager.

We started with a discussion on insolvency frameworks which is a topic that is on our agenda very often, sometimes in general terms and sometimes very specific when we talk about specific banks. This was a more general discussion we had on the basis of the introduction that Sharon Donnery gave us on the work the ECB has been doing on insolvency framework - and I don't have to tell you how important it is to make progress in dealing with legacy issues in the banking system and to support macro-economic adjustment transmission of monetary policy. We will continue the work on that, building on the different reports we are getting from the ECB, from the Commission. The Commission is working on a system of benchmarking and peer reviews and we will come back to that next year. Of course, also ECOFIN will be discussing non performing loans tomorrow, where these issues are also very relevant.

Then, we discussed specific bank cases. Last month, we discussed Banco Populare, the Spanish bank. This month, we discussed the two Venetian banks and we were informed by the different institutions on their role in the decisions that were taken on these banks. I think it is good to point out that the coordination between the institutions is also new for them. The coordination between the institutions involved was efficient and that experience is being built-up as we go along. We are still in the early days of actually putting to work the new resolution frameworks.

Clearly, to put emphasis first of all on the positive sides, we welcomed the ongoing work with the banks. The ongoing positive restructuring of banks having to deal with legacy issues in different banks makes it more complex and more challenging. Each case is different and has to be assessed individually. We welcomed the information provided by the institutions on the confirmation by the institutions that all decisions were taken in full respect of the European legal framework.

However, there is still work to do and lessons to be learnt in terms of possible policy implications. The recent cases have raised a number of issues today, and there may be other areas for improvement and fine-tuning, including the need to ensure consistency.

A couple of topics that were brought up in this context: the importance of harmonising national insolvency frameworks - there are still big differences there which have again come forward in the Italian cases. There is the topic of establishing sound buffers of bail-inable capital, the MRELs. A very important topic is the hierarchy of creditors, getting a very clear creditor hierarchy in the eurozone area, and the proposals of the Commission are being pushed forward at this point. The topic of protecting retail investors: this was of course part of the legacy issues that had to be dealt with. The importance of having sound asset evaluation in the process of dealing with banks to allow also outside investors to participate. They are helped by maximum transparency on the quality of assets. So having an AQR, when possible, is also very important.

And finally, all of this could be put on our agenda to finalise the banking union. Some of the elements we have mentioned, the lessons that we can learn, can be taken forward when we finalise the banking union. Inevitably, that requires both risk reduction and risk sharing.

The institutions have also said that, later on, they will perform a post-mortem analysis of these resolution cases, in more details, and the Commission will review the BRRD in 2018.

After that, the next topic was the post-programme mission to Ireland which already took place in May. We congratulated the Irish authorities on their continued strong economic performance and welcomed that repayment risks, as assessed by the institutions, remain very low.

The next topic was the euro area fiscal stance for 2018. We now have 16 consecutive quarters of growth in the euro area. So we had some debate on whether we can still talk about the recovery phase or whether we are now in the expansion phase. Of course, it depends a little on what perspective you take, but the fact that we have this discussion is a very positive sign. The output cap is closing, and for some countries has already closed. The risk of deflation is disappearing and there is no direct sign of overheating in our economies. So that is where we stand economically. On that basis, both the Commission and the European Fiscal Board advised a broadly neutral stance. So that is what we are taking into consideration when we prepare our draft budgetary plans at national level. We will come back to that later on, after the summer, but this is the starting point of our budgetary processes.

The final topic and our last discussion was on the deepening of the economic and monetary union (EMU), on the basis of the Commission's reflection paper. We had a first general round of discussion with the Ministers. We will have a second round for the EU ministers, but a more broad discussion in Tallinn, when we have the informal Ecofin after the summer. So this was just a first kick-off. We talked about the importance of convergence and what is needed to strengthen and speed up the process of convergence. Some elements are, of course, about finishing off what we have started. So this is about the banking union, the capital markets union, deepening the single market. Second strand: structural reforms. How we can get the incentives right to support and push the structural reform agenda in the different member states. That can be supported by investment instruments, by using the EU budget, using benchmarks, etc. We have also talked, which is sort of the second big issue, about creating long-term stability and shock-absorption - of course, a number of proposals in the Commission's paper regarding the shock-absorption of our member states individually but also the Eurozone as a whole. We had a first exchange on those topics. We will come back to that after the summer in Tallinn.

Thanks and pass floor to the Commission.

Place:        Justus Lipsius building, Brussels
Chair:       Toomas Tõniste, Minister for Finance of Estonia

All times are approximate and subject to change.

from 08.00
Arrivals (live streaming)

+/- 08:30
Doorstep by Minister Tõniste

09.00
Ministerial breakfast (roundtable)

10.00
Beginning of the Council meeting
Adoption of the agenda

Any other business
-   Current financial services legislative proposals (public session)
-   Mandatory disclosure rules (public session)

Presentation of the work programme of the Estonian Presidency (public session)

Approval of non-legislative A items

Commission Mid-term review of the Capital Markets Union Action plan

Non-performing loans

Any other business

At the end of the meeting
Press conference (live streaming)

*           *           *

In the margins of the Council:

 10 July

- Eurogroup meeting
15.00: roundtable
At the end of the meeting: press conference

- 17:45: Technical briefing on non-performing loans in the banking sector by Corso Bavagnoli,  Chairman of the Financial Services Committee subgroup on non-performing loans

The Stabilisation and Association Council (SA Council) between Bosnia and Herzegovina and the European Union held its second meeting on 10 July 2017. The SA Council welcomed Bosnia and Herzegovina's EU perspective as a single, united and sovereign country. It noted the progress of Bosnia and Herzegovina in its EU integration process following the country's application for EU membership of February 2016 and the Council conclusions of September 2016 inviting the European Commission to submit an opinion on the merits of Bosnia and Herzegovina's application. 

The SA Council called on Bosnia and Herzegovina to continue and intensify its efforts to ensure effective implementation of the reform agenda in line with the schedule of the action plan agreed by the Bosnia and Herzegovina authorities, for the benefit of its citizens and in close cooperation with the European Union, international financial institutions and other international partners, as well as civil society. Recalling its first meeting, the SA Council stressed that credible implementation of commitments undertaken by Bosnia and Herzegovina's leadership is the only way to move the country forward on its EU integration path. 

The SA Council welcomed the establishment of the coordination mechanism on EU matters in August 2016 as well as the start of its activities and called on all levels of governance in Bosnia and Herzegovina to ensure the effective implementation of the mechanism, including for the purpose of ensuring harmonised and consolidated answers to the Commission's opinion questionnaire, as an indispensable step towards improving the efficiency of the Bosnia and Herzegovina administration, with due input from all levels of governance across the country. 

The SA Council stressed the need for the Bosnia and Herzegovina authorities to prepare a strategic programme for the country's legal approximation with the EU, as required under the Stabilisation and Association Agreement, and to ensure smooth functioning of all joint EU-Bosnia and Herzegovina bodies under the Agreement, including the stabilisation and association parliamentary committee. 

The SA Council noted that the signature in December 2016 of the Protocol on the adaptation of the Stabilisation and Association Agreement following the accession of Croatia to the European Union and the full implementation of the SAA are important elements of the country's commitment to the EU integration process. 

The SA Council welcomed the adoption of a strategy on integrated border management (IBM) and a new legislative framework on migration and asylum. The SA Council recalled that Bosnia and Herzegovina urgently needs to meet international standards on anti-money laundering and countering the financing of terrorism. With regard to counter-terrorism, the SA Council noted with concern that Bosnia and Herzegovina has been affected by the phenomenon of foreign terrorist fighters and radicalisation. In this respect, the SA Council welcomed the important measures taken by the authorities of Bosnia and Herzegovina over the past year. The SA Council called on the country's authorities to take further steps in this regard, notably to prevent and fight radicalisation. 

Regarding the framework agreement on participation in EU civil and military missions signed in 2015, the SA Council welcomed the efforts of Bosnia and Herzegovina to become actively engaged with EU crisis management operations. The SA Council encouraged Bosnia and Herzegovina to further enhance its role and commitment as a security provider. With this in mind, the SA Council called on Bosnia and Herzegovina to further progress its alignment with EU declarations and decisions of the Council of the EU. 

With respect to EU financial assistance, the SA Council encouraged further progress in preparing coherent countrywide strategies in key sectors such as energy and agriculture to unlock further EU funding. The SA Council acknowledges progress made by Bosnia and Herzegovina in adopting a country-wide strategy in the transport sector which will unlock this sector for support under Instrument for pre-accession assistance II. The SA Council also looks forward to the signature of the transport community treaty by all parties. The SA Council further took note of the adoption of the Bosnia and Herzegovina strategy in the area of environment. While welcoming Bosnia and Herzegovina's participation in regional initiatives, the SA Council recalled the opportunities offered by the connectivity agenda and its future follow-up in order to improve Bosnia and Herzegovina's transport and energy regional inter-connections. 

The SA Council also welcomed the 2016 communication on EU enlargement policy and the 2016 report on Bosnia and Herzegovina adopted by the Commission on 9 November 2016 and invited Bosnia and Herzegovina to follow up on its policy recommendations. 

The meeting was chaired by Ms Federica MOGHERINI, High Representative of the Union for Foreign Affairs & Security Policy and Vice-President of the European Commission. The Delegation of Bosnia and Herzegovina was led by the Chairman of the Council of Ministers Denis ZVIZDIĆ who was accompanied by Deputy Chairman of the Council of Ministers and Minister of Foreign Trade and Economic Relations Mirko ŠAROVIĆ, Minister of Foreign Affairs Igor CRNADAK, and Deputy Minister of Finaces and Treasury Mirsad Žuga. Director General Christian DANIELSSON, European Commission Directorate-General for Neighbourhood and Enlargement Negotiations (NEAR), also took part in the meeting.   

The veteran German will be the most familiar face around the table as the eurozone’s longest serving finance minister, having taken office in late 2009.

He will take some comfort in the reassuringly crisis-free Eurogroup agenda. There is no imminent Greek default on the horizon, the eurozone’s economy is confounding critics, and the populist electoral surge is in retreat.

Read more

The academic fields of science, technology, engineering and mathematics – known as STEM – are becoming progressively more important to economies around the globe. But while the number of people working in STEM is increasing, women are still significantly under-represented and this gender disparity becomes more and more prominent at senior levels.

Across the European Union, while there is near gender parity at undergraduate level across the sciences, less than one-fifth of more senior, decision-making roles are occupied by women. Depending on the country and discipline, this proportion is even lower. This ‘scissor effect’ is a worrying issue in STEM and, in the pursuit of excellence in scientific research, we should strive to tackle and improve diversity in research at institutional and cultural levels.

The European Commission has attempted to tackle the matter of gender inequality in STEM through various policies and funding mechanisms. In Horizon 2020, the EU’s current major research and innovation programme, the objective of gender equality has been enshrined in commitments such as prioritising gender balance in research teams as a ranking factor of project proposals, achieving a target of 40% female representation in expert groups and evaluation panels and, where appropriate, emphasising gender as a focus of research. This strong emphasis on gender by no means undermines some of the excellent examples of research and mentorship to date, but rather emphasises the goals of gender equality in STEM at local, national and European levels.

‘Standing on the shoulders of giants’, a phrase associated with the collective practice of expanding our understanding of the world around us, has more often than not referred to successful male scientists than to their female counterparts. Until the 20th century, women were largely prohibited from studying at higher-level institutes and this has led, in part, to a lack of female role models with the same renown as researchers such as Max Planck, Albert Einstein and Robert Boyle. Historically, arguments were made that once numbers of women entering university reached sufficient levels, gender bias in the sciences would gradually disappear.

“We should be encouraged by the levels of success in STEM research across Europe”

But the so-called ‘leaking pipeline’ has prevailed. Despite the growing number of women studying STEM at undergraduate level and annual increases in the number of women employed as scientists and engineers, women still account for just over a quarter of PhD graduates in engineering, manufacturing, and construction, and only a fifth of those graduating from computing. Only two of the 203 Nobel laureates in physics have been women (Marie Curie and Maria Goeppert-Mayer) and it was not until 2014 that a woman, Maryam Mirzakhani, was awarded the Fields Medal, the most prestigious award in mathematics.

Even more worrying, the latest ‘She Figures’ report from the European Commission has noted the persistence of a sizeable pay gap between male and female researchers. These inequities are not due to innate inabilities of women in the sciences, but rather to underpinning structures and cultures within STEM research.

Many studies have highlighted the disadvantages facing women when it comes to hiring and promotion. In the Netherlands, a study of applications and funding reviews found a bias towards male applicants. Research from Germany has shown that women, despite having as many or more publications in fields such as material science and astronomy, are less likely to hold the more senior role of ‘corresponding author’ on research papers. Further studies have shown that women researchers are less likely to be invited as keynote or guest-speakers at large conferences, a metric often valued in academic promotion. When combined, such biases create an environment favouring male researchers in STEM and, to use the phrase coined by Virginia Vallan of City University of New York, these “many molehills together make a mountain”.

Issues of gender inequality can only be addressed by highlighting potentially biased practices, no matter how embedded, and through clear and robust policy directives supporting women researchers. Taking my own country  as an example, in an attempt to retain excellent female researchers and increase the standard and impact of Irish research, Science Foundation Ireland has recently committed to decreasing the gender imbalance among its award holders.

“Many studies have highlighted the disadvantages facing women when it comes to hiring and promotion”

There are incentives for research bodies to submit applications from female researchers to various programmes. Within three years all higher education institutes in Ireland will need an Athena SWAN Bronze Institutional Award – which requires a commitment to advancing gender equality – to be eligible for funding. This is a dramatic move in the STEM landscape in Ireland and one which has brought discussions and policies on gender equality in the sciences to the fore. Furthermore, a recent policy document from Ireland’s Department of Education and Skills has committed the government to encourage more young women into mathematics- and physics-based courses, where there is a marked difference in the numbers of male and female students enrolling at post-primary and undergraduate level.

At an EU level, it is important to establish networks of women scientists to promote and support gender equality in STEM. Initiatives such as AcademiaNet, set up by Dr Ingrid Wünning Tschol of the Robert Bosch Stiftung in Germany, provide a platform for women to share their expertise across the continent and to establish important networking mechanisms for women working in STEM. Other initiatives attempting to directly tackle gender inequity involve gender quotas and female-only job competitions for positions in research and academia. For example, The Royal Netherlands Academy of Arts and Sciences, 13% of whose membership is female, is to hold women-only elections for up to ten new members.

We should be encouraged by the levels of success in STEM research across Europe. From exciting findings in particle physics at the nuclear research body CERN, to breakthroughs in anti-viral drugs, European researchers are at the forefront of increasing our knowledge of the world around us. But noting the gender inequalities currently evident in STEM, it is important to remember that diversity supports creativity and innovation, and that research is a highly creative endeavour that benefits from the participation of all social groups and genders.

It is important that we continue to highlight potential biases in present research systems and reassess policy structures so that they provide everyone with viable pathways of development and promotion in STEM. Changing certain cultures of research will not negatively impact quality; instead it will enhance the output of the scientific research communities.

IMAGE CREDIT: trans961/Bigstock

The post Progress made on women in science – but much still to do appeared first on Europe’s World.

An exclusive look into the details of the Approval In Principle proceedure of the IMF, and its application on the 3rd Greek Financial Assistance Program: “…the options remain limited. Either the IMF will be satisfied with later, more detailed delineation of the debt relief measures and provide financing, or the Eurogroup will be pressured to consider actual implementation of the measures before the end of the program“

The Greek case of the Eurozone crisis from 2010 onwards has, by now, turned into a mutli-series drama. Another installment came in the June 2017 Eurogroup on the second review of the third Greek financial assistance Program. The review has limped on for more than a year since the conclusion of the first one on May 2016 (e.g. intermediate Eurogroup meetings in December 2016, February 2017), primarily because  of the unwillingness of the IMF to provide financing (so far its input in the Program has been only on policy)  unless the following measures were adopted: (1) additional structural adjustment policies with emphasis on tax and pension reform by Greece, and (2) relief for Greek debt (179% GDP in 2016) by the Eurozone member states to make it sustainable.

The bulk of the additional structural adjustment measures were adopted by Greece under Law 4472/2017, and are to be implemented from 2019. In relation to debt relief, while measures had been delineated in the May 2016 Eurogroup meeting, the IMF deemed them largely insufficient. A standoff was  created between the Eurozone and the IMF similar to an Alphonse and Gaston Routine: the IMF would not provided financing unless additional debt relief measures were assumed (or these were further specified), while Eurozone member states, considering the IMF’s participation necessary,  were unwilling to conclude the second review and implement or, at least, further specify the debt relief measures without IMF financing.

The solution reached was the IMF’s Approval-In-Principle (AIP) procedure. AIP was first implemented during the 1980s debt crisis of Latin American countries, when considerable external financing was required (either direct or indirect, e.g. debt relief, etc.) to complement that of the IMF. However, the banking sector refused to provide it until there was an official Program. In turn, the IMF requested that external financing was in place before it agreed on a Program. AIP offered a way to reassure the banks that there would be a Program so that they could provide the necessary external financing, without committing the IMF until this financing was in place. Thos process was first used for Sudan in 1983 and a total 19 times since through the 1980s[1]. While AIP proved a convenient instrument, there were fears of indiscriminate usage raised, which led to the adoption of a set of AIP arrangements by the IMF in 1984:

1. AIP would be limited to Stand-By Arrangements (a relatively short lending arrangement of the IMF) that would become “effective on the date on which the Fund finds that satisfactory arrangements have been made for the financing of the uncovered gap” in a country’s Balance of Payments.

2. A country seeking AIP would not be treated more favorably than a country seeking outright approval of an assistance Program: any prior actions should be completed before AIP approval.

3. AIP should be used “where substantial uncertainties on the financing of a program remain but management is of the view that… (AIP) would assist  the member in reaching an agreement with is creditors.”

4.  AIP would be used in cases where the IMF’s role would be “to give confidence to other creditors…that members concerned are making serious adjustment efforts”

5.  To avoid delays between AIP and the evntual Program a deadline of 30 days for reaching a deal was set. The Executive Board agreed to the 30-day limit as a guideline, but with flexibility around this on a case-by-case basis.

It is clear that, although these guidelines were created under considerably different global conditions and for countries substantially different from Greece, they were retained in the Greek case. The Greek AIP will be followed by a proposal for a precautionary Stand-By Arrangement of a modest amount (reported close to €2 billion). Moreover, AIP was not agreed until Greece had already implemented the structural adjustment measures requested by the IMF, thus avoiding preferential treatment. AIP was also employed to resolve a standoff on external financing between the Eurogroup and the IMF (similar to the deadlock between the banking sector and the IMF during the 1980s), in this way providing assurances that the structural adjustment undertaken by Greece is sufficient. Finally, the IMF, while examining the implementation of a deadline between the AIP and Greek Program financing, remained flexible on how long this would be.

The question is whether AIP really helped in Greece, Eurozone and IMF reaching an agreement? Here, it seems that it has postponed rather than resolved the problem. Greece has warned that without an agreement on debt relief, the additional structural adjustment measures will not be implemented from 2019. However, the adoption of specific debt relief measures by the Eurogroup requires IMF financing and, in turn, the IMF requires further elaboration of these measures in order to provide this financing. The key element here is the deadline between AIP and eventual IMF financing.

The important point here is the duration between the AIP and IMF financing through the Program. During the 1980s, the 30-day limit was set because of considerable deficiencies in AIP implementation. Since all of the 1980s AIP guidelines were maintained in the case of Greece, it is very likely that a deadline will also be set. However, 30 days seems unlikely, since debt relief for Greece is a politically sensitive issue for Eurozone member states, and especially for Germany with federal elections coming up this September. Concordantly, the Eurogroup in this meeting  also stated that most debt relief measures will be considered after the end of the Greek Program in August 2018.

Taking the above under consideration, if the IMF holds out until then to finance the Greek Program, this would mean duration of one year after AIP, something which that could clearly jeopardize the entire process similarly to the early 1980s. As such, the options remain limited. Either the IMF will be satisfied with later, more detailed delineation of the debt relief measures and provide financing, or the Eurogroup will be pressured to consider actual implementation of the measures before the end of the program. One thing is certain: Even after AIP, this drama series is far from over.

First published in Social Europe on 03.07.2017.

[1] AIP was also used for: Sudan (again) Ecuador, Zaire (twice), Madagascar, Jamaica, Zambia, Côte d’Ivoire (twice), Kenya, Somalia, Chile, Republic of Congo, Mexico, Nigeria, Argentina, Yugoslavia, and Brazil.

The post IMF’s Approval-In-Principle and Greece’s 3rd Program appeared first on Ideas on Europe.

At their meeting in Hamburg, Germany, on 7 and 8 July 2017, G20 leaders adopted a declaration focusing on sharing the benefits of globalisation, building resilience, improving sustainable livelihood and assuming responsibility

 G20 leaders also agreed on several other documents:

Hamburg Action Plan
Climate and Energy Action Plan for Growth
Hamburg Update: Taking forward the G20 Action Plan on the 2030 Agenda
Annual Progress Report 2017
G20 Action Plan on Marine Litter  
G20 Africa Partnership
G20 Initiative for Rural Youth Employment
High Level Principles on the Liability of Legal Persons for Corruption
High Level Principles on Organizing against Corruption  
High Level Principles on Countering Corruption in Customs  
High Level Principles on Combatting Corruption related to Illegal Trade in Wildlife and Wildlife Products
G20 Initiative #eSkills4Girls  
Women Entrepreneurs Finance Initiative
G20 Resource Efficiency Dialogue

 

https://tvnewsroom.consilium.europa.eu/uploads/council-images/thumbs/uploads/council-images/remote/http_7e18a1c646f5450b9d6d-a75424f262e53e74f9539145894f4378.r8.cf3.rackcdn.com/2a6afac8-6234-11e7-ba7b-bc764e093073_100.3_thumb_169_1499336335_1499336335_129_97shar_c1.jpg

On Thursday 6 July and Friday 7 July, the Informal Meeting of Justice and Home Affairs Ministers is held at Tallinn Creative Hub (Kultuurikatel). Ministers focus their discussions on the security and safety of Europe, as this is the main concern of people today – more so than any other issue. The subjects discussed are migration, cooperation with the Ukraine, interoperability of EU databases, data retention, sale of consumer goods, the future of e-justice, and mutual recognition of freezing and confiscation orders.

Download this video here.

Committee meetings, Brussels

Source : © European Union, 2017 - EP

On 7 July 2017, the Council, by common accord with the President of the Commission, Jean-Claude Juncker, appointed Mariya Gabriel as the new commissioner for digital economy and society. The appointment takes effect immediately, and applies for the remainder of the current term of office of the Commission which ends on 31 October 2019.

Mariya Gabriel is a Bulgarian national and has been a member of the European Parliament since 2009. She replaces Kristalina Georgieva who resigned to join the World Bank.

https://tvnewsroom.consilium.europa.eu/uploads/council-images/thumbs/uploads/council-images/remote/http_7e18a1c646f5450b9d6d-a75424f262e53e74f9539145894f4378.r8.cf3.rackcdn.com/b863bf68-977e-11e5-b3f1-bc764e084e2e_465.96_thumb_169_1496914274_1496914274_129_97shar_c1.jpg

EU Finance Ministers of the eurozone meet on 10 July 2017 in Brussels to discuss, amongst other topics, national insolvency frameworks, recent developments in the euro area banking sector and main findings of the 7th post-programme surveillance mission to Ireland.

Download this video here.

Security policy, the fight against terror, trade and climate protection: the G20 summit in Hamburg has an ambitious agenda. But in view of all the disagreements simmering just beneath the surface, many journalists believe the meeting can't be a success. Some even speculate that it could mark the end of the post-war order.

In his speech in Warsaw US President Donald Trump pledged the US's commitment to mutual defence in Nato and harshly criticised Russia's foreign policy. Trump struck the right tone, some commentators write with relief. But in view of his statements so far others fear a new rift between Eastern and Western Europe.