Mario CENTENO, Eurogroup President and Economic and Monetary Affairs Committee (ECON) discuss the implementation of the 2018 national recommendations and the surveillance of national budgets, in the European Parliament in Brussels. The debate is also an opportunity to take stock of the ongoing work on completing the Economic and Monetary Union.

Brussels

exchange of views

meeting

Committee on Economic and Monetary Affairs

economic dialogue (T)

ROSATI, Dariusz (EPP, PL)

CENTENO, Mário (PT)

economic and monetary union package (T)

Economic dialogue: extracts from the exchange of views with Mario CENTENO, Eurogroup President

SOUNDBITE (English), M&#225;rio CENTENO, President of the Eurogroup, <p>The forecast of the different institutions point to a sustained positive outlook not withstanding downside risk stemming from external factors. Against this backdrop we must remain vigilant. This brings me to the topic of economic policy mix which the euro area member states should be pursuing. Our policies should make the euro area economy more resilient. Ahead of the next downturn. </p>

SOUNDBITE (English), M&#225;rio CENTENO, President of the Eurogroup, We must recognize that imbalances in our monetary union are two sided. Convergence can only be reached through actions in both surplus and deficit countries.

SOUNDBITE (English), M&#225;rio CENTENO, President of the Eurogroup, The revised EBP did not improve the situation in terms of debt funding costs. We see that in the markets everyday which means that it did not dispel concerns regarding the Italian budget strategy. We now are waiting for the Commission's opinion on Italy's revised plan which is expected tomorrow.

SOUNDBITE (English), M&#225;rio CENTENO, President of the Eurogroup, The Greek economy has now returned to growth and the outlook is positive. The fiscal performance has been outstanding. Recent data suggest that Greece will overshoot its fiscal objectives for the third year in a row including the primary surplus target of three point five percent.

SOUNDBITE (English), M&#225;rio CENTENO, President of the Eurogroup, One of our priorities is the completion of the banking union. More concretely the implementation of a backstop for the Single Resolution Fund, which will be provided by the European Stability Mechanism. The Eurogroup is in the process of drawing up the details of the backstop. It will take the form of a fiscally neutral credit line the size of which would be in line with the target level of the SRS.

SOUNDBITE (English), M&#225;rio CENTENO, President of the Eurogroup, There is a discussion about possibly revising collective action clauses to further facilitate decision making in a case adapt to restructuring where needed. The Commission and the ESM have been in constructive talks on an optimal work sharing, while avoiding duplication and fully respecting the competences allocated by the institutions to the institutions via the treaties. And this is a very important point for us.

SOUNDBITE (English), M&#225;rio CENTENO, President of the Eurogroup, A complete banking union should eventually have a European deposit insurance scheme. This objective is recognised by everyone. At the same time, the issue remains politically sensitive since views differ on the risk reduction conditions that have to be in place to this end.

SOUNDBITE (English), M&#225;rio CENTENO, President of the Eurogroup, The example of other currency unions such as the US and political realism suggest that risk sharing in the EMU will predominantly have to come from private channels. But by this I mean a completed banking union with cross-border pan-European banks and a capital markets union.

SOUNDBITE (English), Dariusz ROSATI (EPP, PL), What can be done in order to induce to to encourage the Italian government not to engage in measures in decisions that would reduce the long term potential growth of this country.

SOUNDBITE (English), M&#225;rio CENTENO, President of the Eurogroup, We need to allow time for the reforms that Italy implemented in the last decades to materialise to have an impact to go into benefit for its citizens. The euro group supports the European Commission on its opinion on under the EBP. 