Yesterday, the Euro-area leaders took decisions that steer the euro-area out of the storm of the past few months. The choices made will bring important benefits for European citizens, for the stability of the euro-area and for the global economy.
Greece will get the necessary financing to support its adjustment towards stronger public finances and competitiveness. The lowering of the interest rates and the extension of the maturities of the EU loans for Greece will substantially improve the country’s debt sustainability and refinancing profile. The offer from the private sector, as presented by the Institute of International Finance, for a voluntary private sector involvement to improve Greece’s debt profile, is an important contribution in this respect.
The EFSF and ESM are given the necessary instruments and flexibility to effectively and efficiently ensure euro-area financial stability against market pressures. This is an important reinforcement of the fundaments of the euro-area governance structures.
The reduced EFSF lending rates and lengthened maturities for Greece will be applied also for Portugal and Ireland, thereby strengthening their adjustment programmes considerably. This will also, of course, improve their debt sustainability.
Furthermore, a clear way forward was given for the finalisation of the legislative package for economic governance in the European Union, and for further improvements of the working methods of the euro area.
It is clear there is still much work to be done in all corners of Europe before we are firmly out of the stormy waters. But the direction is now clear, and we have all reasons to be confident about getting there, as long as all the partners do their share of implementation rigorously.