Good evening, the meeting today was a very good one, it was a success.
First of all let me pay tribute to Paschal, the President of the Eurogroup, because in these weeks he worked very hard building on the work of his predecessors, but without his steering, inclusiveness and commitment this agreement would have been much more difficult. Thank you Paschal, it was really a great contribution to this success.
We were able to reach this agreement also on the basis of the risk reduction that we analysed today. The situation of the banking sector is far more resilient than it was ten years ago and without this, this new agreement would have been much more difficult. The agreement we reached on the ESM Treaty and on the backstop is good news for the stability and resilience of the euro area and as such it is good news forour citizens and businesses. We are not at the end, we have now the signature of the Treaty and the ratification process but today we really made a substantial step and it was a great success. It also demonstrates the will of compromise amongministers with the President's role that I think is very promising for the challenges ahead of us.
We began our discussion with an exchange of views with Kristalina Georgieva i on the IMF's Article IV assessment of the euro area. We were pleased to see how similar is the assessment of the IMF and the one we made as Commission.
The Managing Director made three points that I deem very important:
First, on the need to ensure an effective deployment of Next Generation EU i.
Second, on the fact that pandemics tend to worsen inequality and that this pandemic will be no exception. We should work strongly to avoid the increase of inequalities among regions, generations and the society.
Third, on the importance of not withdrawing policy support too soon. We are well aware of the risks that this would entail. We have made very clear that fiscal policy should continue to support the economic recovery in 2021.
I will not run through the conclusions of the post-programme surveillance reports for Cyprus, Ireland, Portugal and Spain, I will just recall the conclusion:all countries retain their capacity to repay their debt vis-à-vis the ESM.
On Greece, I presented the 8th enhanced surveillance report. Our key conclusion was that, in spite of the adverse circumstances caused by the pandemic, Greece has taken the necessary actions to enact its reform commitments. Most notable is the major reform of the insolvency framework, which should be swiftly implemented via the adoption of secondary legislation and the roll-out of the necessary IT system.
There has also been good progress with fiscal-structural reforms, speeding up public investments, and reforms of public administration.
So, some welcome and well-deserved good news for Greece today despite the difficult situation and the role ahead of the country. For this reason, the Eurogroup has agreed to the release of the next set of debt measures, worth €767 million.
What is clear is that we are moving gradually from emergency to recovery, in 2021 two thirds of the measures planned for next year, worth around 1.5% of GDP, are not emergency but of a more general recovery-supporting nature, only 1% will still be emergency measures.
Member states will have to assess whether to extend the emergency support or to withdraw it. The premature withdrawal would be a mistake. When adjusted for the expected withdrawal of emergency emergencies, the euro area fiscal stance in 2021 should continue to be supportive (+1.4% of GDP), which is the right stance at this time.