European Union

Good evening and welcome to this press conference. We have just finished the Eurogroup meeting and we've come to a positive conclusion on the proposals by the institutions. All the intense work of the last week has paid off and let me here also extend my thanks to the teams of the institutions and the team of the Greek government that had worked so hard these last months to reach an agreement. We also have reached agreement at the political level in the Eurogroup. We had a very constructive and good atmosphere. Of course there were differences, but we have managed to solve the last issues. We have issued a statement outlining the details of our agreement. I will therefore mention only the main elements. 

First, we welcomed the agreement that was reached between Greece and the institutions on policy conditionality. It is to our mind in line with the key objectives set by the euro summit on 12 July, and if implemented with determination -- of course it always boils down to determination -- it will allow the Greek economy to return to sustainable growth. 

Secondly, we commended the Greek authorities on the strong commitment shown in the last weeks in the normalisation of working methods with the institutions. I think that was very helpful to have a good and fruitful process and also we've seen important and determined legislative steps over the past weeks and days even, in Greece, and that has helped in the process of rebuilding trust; and many of the colleagues in the Eurogroup made that point. 

Thirdly, on the policy conditionality, we welcomed the broad scope of the policy measures contained in the Memorandum of Understanding (MoU), as agreed. It's a comprehensive and ambitious reform package, it addresses the main challenges both on reaching sound public finances to return to growth, but also structural policy frameworks to enhance competitiveness. And finally it safeguards financial stability; it deals with the issues with the banks. 

On the latter point, there will be later this year, this autumn, an asset quality review and stress test, and on the basis of that, recapitalisation will take place. In that process the bail-in instrument will apply for senior bondholders, whereas the bail-in of depositors is explicitly excluded. You will find this in our statement. 

Fourthly, the Eurogroup underlined that a significantly strengthened privatisation programme is a part of the new ESM programme. Therefore it is important that the independent fund which will be set up will be established in Greece at the latest by end-2015. It will be under the supervision of the relevant European institutions. It will take on board the privatisation of state assets and the proceeds of this fund will, for the first €25 billion, completely be used to repay debt and for the second part of the target of €50 billion, it will be 50/50: 50% to repay debt and 50% can be reinvested. This fund will be set up before the end of the year. Proposals have to be made already at the latest by end October 2015. The ownership of this fund will be transferred as soon as possible after the recapitalisation of the banks has taken place later this year. 

Fifth, on prior actions. We welcomed, as I already said, the comprehensive set of prior actions that has been legislated by the Greek authorities. The most recent prior actions legislated have been positively assessed by the institutions and I think this demonstrates that programme ownership has been picked up seriously and constructively by the Greek government. 

The overall financing envelope of the agreed ESM programme will amount to €86 billion. This includes a €25 billion bank buffer, which can be available if needed to address potential bank recapitalisation and resolution costs. This money will, later on, after the first review as I said, be transferred to segregated account in the ESM. Whether it is needed will be decided of course after the assessment of the banks and the stress test later this year. 

On debt sustainability - and this is of course the key issue - a debt sustainability assessment has been provided by the Commission, in a strong liaison with the ECB. The analysis basically concludes that debt sustainability can be achieved through a far-reaching and credible reform programme -- I think we have that in front of us -- and debt-related measures without nominal haircuts, because that was made explicit in the euro summit statement of 12 July. The Eurogroup stands ready to consider, after the positive completion of the first programme review, possible additional measures to ensure gross financing needs remaining at a sustainable level. “Gross financing needs” is the debt service approach that we will take when we look at the debt sustainability. We will do that after the successful completion of the first review. 

Finally, we welcomed the intention of the IMF Board to consider further financial support for Greece. They will do so in the autumn. We stressed that such IMF involvement for the Eurogroup is indispensable. We welcomed the positive assessment of IMF staff of the policy conditionality contained in the MoU. For the IMF Board to consider further financial support, there are two issues that are crucial and we realise and accept that. First of all there needs to be a full specification of fiscal, structural and financial sector reforms; and secondly that debt sustainability is ensured. On those reforms, just to mention one is the pension reform and we have again underlined that at the latest in October there has to be clarity on those pension reforms from the side of the Greek government, in agreement with the institutions. 

Finally, as regards the next steps, the necessary elements are all in place now to launch the relevant national procedures to get the formal approval of the ESM financial assistance programme. We expect that the ESM Board of Governors which will take the formal decision will be in a position to approve the proposal on Wednesday, 19 August, by the end of the day; and that it would also unlock the initial fist tranche of the programme. 

That will be all from me. I will now give the floor to Vice-President Dombrovskis and to Klaus Regling.

The Eurogroup welcomes the agreement that has been reached between Greece and the European Institutions, with input from the IMF, on the policy conditionality underlying the new ESM macroeconomic adjustment programme. The Eurogroup commends the Greek authorities for their demonstrated strong commitment as shown by the normalisation of the working methods with the Institutions and the conduct of the negotiations in a determined and swift manner. This agreement is in line with the parameters and key objectives set by the Euro summit on 12 July and provides a comprehensive framework for restoring the Greek economy to a sustainable path. 

The Eurogroup welcomes the wide scope of the policy measures contained in the Memorandum of Understanding (MoU), which, if implemented with determination, will address the main challenges facing the Greek economy. We are confident that decisive and as swift as possible implementation of the reform measures as spelled out in the MoU will allow the Greek economy to return to a sustainable growth path based on sound public finances, enhanced competitiveness, high employment and financial stability. 

Greece will target a medium-term primary surplus of 3.5% of GDP  with a fiscal path of primary balances of -0.25% in 2015, 0.5% in 2016, 1.75% in 2017 and 3.5% in 2018 to be achieved notably through upfront parametric fiscal reforms supported by measures to strengthen tax compliance and fight tax evasion. Greece will undertake an ambitious reform of the pension system aimed at ensuring its sustainability, efficiency and fairness. It will specify policies to fully compensate for the fiscal impact of the Constitutional Court ruling on the 2012 pension reform and to implement the zero deficit clause or mutually agreeable alternative measures by October 2015. Greece has furthermore committed to key labour and product market reforms to open up the economy to investment and competition, as well as to modernise and depoliticise the public sector. With regard to the financial sector, Greece has committed to take decisive measures to safeguard stability, including a recapitalisation of the banks as required, measures to enhance the insolvency framework and a significant improvement of the governance of the banks and the Hellenic Financial Stability Fund (HFSF). Following the results of the Asset Quality Review and Stress Tests before the end of the year, the bail in instrument will apply for senior debt bondholders whereas bail in of depositors is excluded. The Eurogroup stresses that the agreed conditionality needs to be further specified as requested by the IMF a matter of priority, in particular in the areas of pension reforms and financial sector strategy and governance, in agreement with the three Institutions in time for the completion of the first review under the ESM programme. Moreover, Greece will take urgently needed steps to tackle the non-performing loan (NPL) problem in the banking sector. Given the magnitude of the problem, we urge the authorities to develop all necessary instruments to that end, including opening the market for NPL servicing and disposal with the appropriate safeguards to protect vulnerable debtors and exploring the possibility of a bad bank. 

Compliance with the conditionality of the MoU will be monitored by the Commission in liaison with the ECB and together with the IMF, as foreseen in Article 13(7) of the ESM Treaty. 

The Eurogroup stresses that a significantly strengthened privatisation programme is a cornerstone of the new ESM programme. The Eurogroup welcomes the Greek authorities' commitment to adopt new legislation to ensure transparent privatisation procedures and adequate asset sale pricing, according to OECD principles and standards on the management of State Owned Enterprises (SOEs). To ensure a more ambitious privatisation process, an independent fund will be established in Greece under the supervision of the relevant European institutions by end-2015 and encompass the privatisation of independently valuated state assets, while avoiding fire sales. The Eurogroup expects the Greek government to endorse the plan for this fund by the end of October 2015 so that it can be operational by the end of the year. Its task will be to quickly identify, transfer over the lifetime of the programme, and manage valuable Greek assets through privatisation and other means, including minority shareholdings and to increase their value on a professional basis. This will include the shares in Greek banks after their recapitalisation, thus also enhancing banks' governance. This should ensure that a targeted value of EUR 50 bn can be realised, by putting the assets on the market, of which EUR 25bn will be used for the repayment of recapitalization of banks and other assets and 50 % of every remaining euro (i.e. 50% of EUR 25bn) will be used for decreasing the debt to GDP ratio and the remaining 50 % will be used for investments. The legislation to establish the Fund shall be adopted in agreement with European institutions. 

The Eurogroup appreciates that the Greek authorities have taken additional important legislative steps over the last few days. This supports the gradual process of rebuilding trust, demonstrating the authorities policy resolve and programme ownership. Those steps include notably additional fiscal measures on the tax and expenditure side, legislation on early retirement as well as an extensive set of actions in relation to the financial sector and product markets. In addition, in line with the Eurogroup statement of 16 July, the Greek authorities took measures to adjust and complete the legislation adopted on 15 July 2015. The authorities have also repealed a number of provisions backtracking on previous programme commitments. 

The Eurogroup welcomes that the implementation of those prior actions has been assessed positively by the Institutions. The Greek authorities have confirmed their intention to complete by September the follow up actions identified by the Institutions, including the need to bring the adopted household insolvency law in line with the proposal of the Institutions. 

Based on the assessment of the Institutions, the ESM financial assistance facility agreement will cover an amount of up to EUR 86 bn. This includes a buffer of up to EUR 25 bn for the banking sector in order to address potential bank recapitalisation and resolution costs. 

The first tranche under the ESM programme of EUR 26 bn will consist of two sub-tranches. The first sub-tranche of EUR 10 bn will be made available immediately in a segregated account at the ESM for bank recapitalisation and resolution purposes. The second sub-tranche of EUR 16 bn will be disbursed to Greece in several instalments, starting with a first disbursement of EUR 13 bn by 20 August, followed by one or more further disbursements in the autumn subject to the implementation of key milestones based on measures outlined in the MoU and to be specified by the European Institutions and agreed by the EWG. 

A second tranche for banking recapitalisation and resolution needs of up to EUR 15 bn can be made available after the first review and no later than 15 November, subject to the completion of the planned Asset Quality Review and Stress Test and the implementation of the financial sector deliverables of the review. These funds will initially be transferred to the segregated ESM account and can be released upon the agreement of the ESM Board of Directors. 

The debt sustainability assessment was conducted by the Commission, in liaison with the ECB, as foreseen in Article 13(1) of the ESM Treaty. The analysis concludes that debt sustainability can be achieved through a far-reaching and credible reform programme and additional debt related measures without nominal haircuts. In line with the Euro summit statement of 12 July, the Eurogroup stands ready to consider, if necessary, possible additional measures (possible longer grace and repayment periods) aiming at ensuring that Greece's gross financing needs remain at a sustainable level. These measures will be conditional upon full implementation of the measures agreed in the ESM programme and will be considered after the first positive completion of a programme review. The Eurogroup reiterates that nominal haircuts on official debt cannot be undertaken.

The Eurogroup considers the continued programme involvement of the IMF as indispensable and welcomes the intention of the IMF management to recommend to the Fund's Executive Board to consider further financial support for Greece once the full specification of fiscal, structural and financial sector reforms has been completed and once the need for additional measures has been considered and an agreement on possible debt relief to ensure debt sustainability has been reached. Resulting policy conditionality will be a shared one as the policy conditionality underlying the ESM macroeconomic adjustment programme is developed in parallel to the one of the IMF. Once approved, the full re-engagement of the IMF is expected to reduce subsequently the ESM financing envelope accordingly. The Eurogroup welcomes the positive assessment of IMF staff of the policy conditionality contained in the MoU as confirmed by the IMF Managing Director and looks forward to an IMF programme based on the latter.

The Eurogroup considers that the necessary elements are now in place to launch the relevant national procedures required for the approval of the ESM financial assistance. The Eurogroup expects that the ESM Board of Governors will be in a position to authorise the European Commission signing the MoU on behalf of the ESM and approve the proposal for a financial assistance facility agreement by 19 August, subject to completion of national procedures, and thereby unlock the initial tranche of up to EUR 26 bn.

General : Looking for your first professional experience in European affairs? Want to discover the daily work of an international institution? The European Parliament offers several kinds of traineeships to provide opportunities for learning more about its activities. A new application period starts on 15 August. Read on for more information on how to apply.

Source : © European Union, 2015 - EP

General : Looking for your first professional experience in European affairs? Want to discover the daily work of an international institution? The European Parliament offers several kinds of traineeships to provide opportunities for learning more about its activities. A new application period starts on 15 August. Read on for more information on how to apply.

Source : © European Union, 2015 - EP

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EU Ministers of Finance of the Eurozone meet in Brussels on 14 August 2015 to discuss a financial deal with Greece.

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On paper, gender equality is high on the current EU agenda. In his 10 ‘Commandments’, President Juncker has committed to a more gender-balanced Commission; the European Parliament has maintained continued pressure on other institutions to present and adopt regulatory measures; and, just last week, Commissioner Jourova pledged to present a comprehensive legislative package on gender equality in 2016.

Source: Greens/European Free Alliance Group

This focus on gender equality shouldn’t come as a surprise; women can be the edge Europe needs to stay ahead in a competitive global setting.

There is a clear business case for more gender equality in the EU, with numerous studies showing the economic benefits for businesses in fostering diversity in senior positions – investors also care more and more about companies’ corporate and social responsibility performance. In addition, to keep its position as a global agenda-setter, the EU can only benefit from adapting to social changes and acknowledging the powerful voice of a growing number of female thought leaders. After all, we’re in the age of Malala, Commissioner Margrethe Vestager, Taylor Swift and Facebook’s Sheryl Sandberg.

However, recently the EU seems to have a limited impact when it comes to pushing gender equality forward, and progress has been stalling in the last ten years:

• Gender-related law passed in the last two Council Presidencies is almost non-existent, and some measures such as the Maternity Leave Directive have been withdrawn, while ongoing files like the Women on Boards Directive are stalled, and adopted measures such as recommendations on gender mainstreaming face implementation issues.
• Statistics paint a bleak picture: persisting pay (16.4%) and pension (39%) gaps[1], continued gender imbalance in decision-making (see graph below), and prevalence of gender-based violence.
• Progress amongst Member States is uneven, and at the current pace equal pay will have to wait 70 years (that’s something to make former Justice Commissioner Viviane Reding furious!)

Source: European Institute for Gender Equality

Will Commissioner Jourova’s upcoming legislative package bring some new energy to the gender equality project? Despite the EU’s ability to set political agendas, legislating gender equality faces many obstacles within the institutions, while cultural and subsidiarity issues can delay progress in Member States. Overall, it seems that what’s needed for concrete progress is a comprehensive push where the EU, Member States and the industry alike focus on what they do best, be it agenda-setting or legislating, to strive for a more equal Europe.

Institutional hurdles at EU-level       

Within the EU institutions, it seems that gender as a policy issue is not currently being prioritised. While gender equality is a third of Commissioner Jourova’s mandate, only 8 policy officers in one dedicated Unit are currently focusing on gender equality in the Commission. In the European Parliament, the formal impact of the gender equality Committee seems equally limited – despite continuous work to pressure other institutions to adopt legislative measures, most recent projects have been dedicated to progress reports or non-binding resolutions. Finally, there’s no Council formation dedicated to gender equality.

As for the role of dynamics between institutions, they often stall the legislation that manages to make its way through to negotiations. The Maternity Leave Directive proposal, which seeked to extend the minimum leave period from 14 to 18 weeks, was recently withdrawn by the Commission due to being blocked in the Council and despite the efforts of the Parliament – the same situation that stalls the Women on Boards proposal aiming to improve gender balance in corporate governance; showing the difficulties of transitioning such proposals from a more ambitious Parliament to a more conservative Council.

Source: AFP/Getty Images
MEP Licia Ronzulli votes for the extension of paid maternity leave

Member States’ role: How important is the subsidiarity issue?

Several Member State-level issues keep gender equality from progressing faster. Gender at a national level is increasingly bundled with other discrimination issues in administration and is often justified solely through economic goals such as labour efficiency, rather than claimed as an objective in itself. Public servants working on gender mainstreaming within other policy issues are often too strained working across multiple files to make a difference, while the EU-recommended gender impact assessments are almost non-existent – the soft nature of most recent EU law on gender issues makes for weak regulatory pressure on Member States.

On a more political level, some Member States have shown not to appreciate being told how to manage gender relations – due partly to the politically sensitive nature of the subsidiarity debate. Indeed, although most Member States proactively recognise the importance of gender equality, the issue is so embedded in national culture that trying to introduce EU law on the topic can lead them to adopt a defensive position – partly explaining Germany’s stalling of the Women on Boards Directive in Council, despite recently passing legislation at national level to improve gender quotas on company boards. This is coupled with a resurgence of ultra-conservative parties associated with traditional gender roles preferences in several Member States – while Sweden maintains the only self-proclaimed feminist government and diplomacy in the EU.

The future of gender equality: Much more than economic performance

Commissioner Jourova’s forthcoming proposals could bring a comprehensive policy package to the table – but they’re unlikely to succeed in bringing genuine gender equality to the EU without a much stronger and committed support from the EU, Member States and the industry.

In addition, depending on the content of the policy package, and in reaction to Commissioner Jourova’s statement that it will mostly focus on ‘economic prosperity, not social change’[2], perhaps it is necessary to acknowledge that long lasting change will only be achieved when gender equality is decoupled from economic performance and progresses at all levels of societal activity: while women are a formidable workforce that is currently underutilised, gender equality goes far beyond labour efficiency, which is just a tree in the forest of women’s rights.

Lucie Martin

[1] Statistics sourced from the Report of the European Parliament’s Committee on Women’s Rights and Gender Equality adopted on 13 May 15, on the EU Strategy for equality between women and men post 2015.

[2] Heath, R. ‘Maternity leave’s pregnant pause’ in Politico, 4th August 2015 (online edition) – article available here : http://www.politico.eu/article/europe-bailout-women-jourova-employment-equality/