Eurogroup praises Cyprus on post programme results, assesses 2018 draft budget, elects Centeno as next President

“A year and a half after exiting the programme, Cyprus is exceeding expectations, particularly on growth”, Jeroen Dijsselbloem said, following the Eurogroup meeting of 4 December in Brussels, which assessed two cases of post programme surveillance, namely Cyprus and Spain.

“We praised the macroeconomic and fiscal performance of Cyprus and emphasized the need to tackle the high level of non-performing loans and continue the reform momentum, but overall also for Cyprus a very positive picture”, President Dijsselbloem stated.

The Eurogroup also reviewed the Commissions assessment on the 18 draft budgetary plans, according to which there are risks of non-compliance for Belgium, France, Italy, Austria, Portugal and Slovenia, and invited these member states to consider in a timely manner the necessary additional measures to address the risks identified by the Commission and to ensure that their 2018 budgets will be compliant with SGP provisions. The Eurogroup will monitor these cases carefully and follow-up in early spring (2018).

Based on the Commission assessment, the following Member States plans are deemed to be broadly compliant with the SGP in 2018: Estonia, Ireland, Cyprus, Malta, Slovakia � under the preventive arm and Spain under the corrective arm. The Eurogroup invites these Member States to ensure compliance with SGP provisions within the national budgetary processes and welcomes their commitment to take any necessary measures.

According to Jeroen Dijsselbloem, the economic situation throughout the Eurozone has improved and is improving. As mentioned almost every quarter, the growth estimates are revised upwards. Growth is broad-based, strong employment creation and public deficits going down across the board. Also, the aggregate debt level is expected to come down, even though still at a moderate pace. “This is the time to take steps, to create that fiscal space that we need, in case the economy would slow down again. Now is the time to bring down those debt levels to create that fiscal space for the future. That is true for the many of the members states still”, the President of the Eurogroup said.

In a formalized statement, the Eurogroup takes note that, based on the Commission assessment, the following Member States plans are deemed to be at risk of non- compliance with the SGP in 2018: Belgium, Italy, Portugal, Slovenia and Austria � under the preventive arm of the Stability and Growth Pact (SGP) – and France � currently under the corrective arm of the SGP – assessed under the assumption of a timely and durable correction of the excessive deficit.

According to the Commission assessment, the DBPs of these Member States might result in a significant deviation from the adjustment path towards their respective MTOs. In addition, Italy, Belgium and France are also not expected to comply prima facie with the debt reduction benchmark in 2018. The Eurogroup invites all these Member States to consider in a timely manner the necessary additional measures to address the risks identified by the Commission and to ensure that their 2018 budget will be compliant with SGP provisions.

The Eurogroup welcomes that a number of Member States plans are deemed to be compliant with the SGP in 2018: Germany, Lithuania, Latvia, Luxembourg, Netherlands and Finland, all under the preventive arm. The Eurogroup notes that Member States having outperformed their medium-term objectives could use their favourable budgetary situation to prioritise investments to boost potential growth while preserving the long-term sustainability of public finances.

Earlier, the Eurozone Ministers elected Dijsselbloems successor in the presidency, Mario Centeno, who will take on the role of the President of Eurogroup as of 13 January 2018. “Before I give him the floor, let me say that we had four excellent candidates and I want to thank them all also here, publicly, for coming forward, putting their candidacy forward, showing their interest in and commitment to the work of the Eurogroup, and their sportsmanship in this election process”, the current President said during the final Press Conference.

Source: Cyprus News Agency