HIGHLIGHTS-Comments from euro zone finance ministers

June 7 (BestGrowthStock) – Following are comments from euro zone
finance ministers and other officials who gathered in Luxembourg
on Monday for a meeting, with the agenda focused on the euro
zone debt crisis.

EU PRESIDENT HERMAN VAN ROMPUY

On imbalances:

“In the task force we very briefly (discussed) imbalances
and competitiveness. We haven’t tackled at this stage the
problem of surplus countries and — this is also the point of
view of the (European) Commission — the first priority is to
tackle those countries which have competitiveness problems. That
is what we are focusing on today and in the coming weeks. The
other imbalances we will speak about later.”

“In my view, and I share this view with the Commission, the
main problem is not the countries with a surplus, the main
problem is the countries with deficits.That is not only due to
internal demand problems in the surplus countries but is due to
supply problems, competitiveness problems in the countries with
high deficits.”

On sanctions for breaking EU budget rules:

“Non-financial sanctions would require amendments to (EU)
treaties.”

“We have not excluded the possibility of amending the
treaties — but we concentrated on what can be done in the short
term, in the framework of the existing treaties. That would not
allow for non-financial sanctions to be handed down. But there
is no taboo subject on that. We will talk about that later if
there is a consensus on amending the treaties and on
non-financial sanctions.”

On levels of public debt:

“So far the focus has been almost exclusively on the maximum
annual deficit. One idea would be to launch the excessive
deficit procedure for countries where debt is not reduced
quickly enough.”

“Sound budgetary policies are necessary but not sufficient
to improve competitiveness.”

On EU budget rules:

“On the Stability Pact we made progress on a number of
elements. Each judged by itself may seem a small step. Taken
together they represent a new way of working … In each spring
national budgetary plans will be presented to the (European)
Commission and European member states. Timing is key here.”

“A national parliament would be able to judge its
government’s budget plans, knowing fully their credibility. We
will create more sanctions earlier on. To use the traffic light
image, you only got fined when you drove through the red light
of 3 percent (budget deficit). From now on you could be in
trouble for driving through orange.”

EUROGROUP CHAIRMAN JEAN-CLAUDE JUNCKER

On special-purpose vehicle for financial stability:

“The facility has just been set up today in the form of a
limited-liability company under Luxembourg law.”

“The facility will be operational as soon as countries
representing 90 percent of shareholdings have completed their
national procedures, which is expected in the course of June.”

“The recruiting process for the CEO of the facility has
begun and he or she will be nominated very shortly, in the
coming days, along with the chairman of the board.”

OLLI REHN, EUROPEAN COMMISSIONER FOR ECONOMIC AND MONETARY
AFFAIRS

On Spanish, Portuguese fiscal programmes:

“Our preliminary view at this stage is that the revised
targets for 2010 and 2011 … are indeed appropriate.”

On European economy:

“Now the main issue is indeed to restore and reinforce
confidence in the European economy.”

EUROGROUP CHAIRMAN JEAN-CLAUDE JUNCKER

On fiscal consolidation steps by Spain, Portugal:

“The measures announced are significant and courageous. They
will without any doubt contribute to stabilising debt levels. It
is on the other hand also clear that further consolidation will
be needed beyond 2011, together with further progress with
structural reforms. We have very strong commitments from the two
countries involved to take action to that effect. The countries
are also working on additional measures if necessary to achieve
the targets for 2011.”

On Estonia:

“Estonia will become the 17th member of the euro area on the
1st of January, 2011.”

“We adopted some strong policy messages … to ensure
convergence in Estonia remains enshrined.”

“The first commitment of the Estonian authorities is to
ensure the sustainability of convergence and implementing
further reforms containing financial discipline, preserving
financial stability.”

On Hungary:

“I’m not really concerned by Hungary … the Hungarian
situation is in no way similar to the one in Greece or other
countries, it simply shows there is a large nervousness on
financial markets.”

OLLI REHN, EUROPEAN COMMISSIONER FOR ECONOMIC AND MONETARY
AFFAIRS
“There is no uncertainty left about the euro zone’s capacity
to provide” conditional aid to countries in fiscal trouble.

EUROGROUP CHAIRMAN JEAN-CLAUDE JUNCKER

On euro zone fiscal consolidation:

“We will pursue fiscal consolidation beyond 2011.”

On talks with IMF Managing Director Dominique Strauss-Kahn:

“We are sharing a common analysis of the importance of
front-loading consolidation efforts.”

IMF MANAGING DIRECTOR DOMINIQUE STRAUSS-KAHN

On Hungary:

“I see no reason to be concerned. They will do what they
have to do. I have no special concern.”

On a possible earlier meeting with Hungary:

“On our side, we are ready. It depends on the Hungarian
government. I see no reason why it could not happen.

On the possible spread of Greek problems to other countries:

“Today, the Europeans are going to complete the EFSF
(European Financial Stability Facility) and that’s a good step
forward. But of course it takes time…Markets have to
understand this, that the commitment of the euro zone countries
with the help of the IMF is a strong one.

“The mechanism that will be established by the members of
the euro group is an important element of the stabilisation of
the system…So I think after some time things will come back to
normal.

“Fiscal sustainability is certainly an important thing for
all countries, including in Europe … But you have to
differentiate your policies depending on the fiscal room that
different countries may have, taking into account the balance
between the face that you have to go back to the sustainable
track on the fiscal side and the fact that you need to maintain
the highest possible level of growth… So it leads to different
actions in different countries.”

Asked if the IMF was ready to contribute 250 billion euros
to the EU assistance fund: “The IMF has said it is ready to
contribute to all the programmes which the Europeans announced
… in proportion to their contributions (to the IMF).”

GERMAN FINANCE MINISTER WOLFGANG SCHAEUBLE

“We have a shared responsibility, we have a shared currency.
The necessary steps must be taken. We need more efficient tools.
We must decide what we change quickly within the framework of
existing treaties.”

He said they needed action on more efficient supervision,
steps to take early action on cases where stability and growth
pact rules may be broken.

“It shows the development (in the euro currency) that we
have to push ahead with what we have started. It is important
that we get the special purpose vehicle under way.”

BELGIAN FINANCE MINISTER DIDIER REYNDERS

“A euro which allows one to be more competitive and helps to
prepare exports better in the European Union is not a euro which
poses problems.”

“What we must avoid is rapid and frequent fluctuations (i.e.
in the euro’s exchange rate).”

FINNISH FINANCE MINISTER JYRKI KATAINEN

On G20 and bank levy:

“It would have been very good if they had agreed on this
issue. It is a little bit sad that they did not agree on that.”

On euro zone enlargement:

“We have to treat everybody similarly. If there is a country
that fulfils all the criteria it should have the same right as
we all have had.”

CYPRIOT FINANCE MINISTER CHARILAOS STAVRAKIS

“Certainly we are facing huge imbalances. The challenge is
for the deficits to be reduced without leading to a recession,
which would turn into a vicious circle in the sense that a
further slow down reduces tax receipts and increases government
spending.”

JEAN-CLAUDE JUNCKER, CHAIRMAN OF THE EUROGROUP

“I do not see any problem at all with Hungary. I only see
the problem that politicians from Hungary talk too much.”

“I am not concerned about the existing level of the euro. I
am concerned about the abruptness of the change.”

AUSTRIAN FINANCE MINISTER JOSEF PROELL

“Today we will consult intensely on how we will further
develop the special purpose vehicle into a safety mechanism to
back up the euro.”

Asked if Hungary’s debt situation posed a risk for the euro
zone, he said: “I do not think that Hungary can present a
danger.”

DUTCH FINANCE MINISTER JAN KEES DE JAGER

“What we do see is that the present exchange rate of the
euro is at about its historic average. Other economies in the
world have a higher debt and a higher deficit than the average
of the euro zone.”

“We should look also at markets such as the United Kingdom,
the United States and Japan which have both higher debts and
higher deficit levels.”

“Of course Europe has to do its part. We need to consolidate
and we need to frontload. But do I have big concerns about the
sustainability of the euro zone? No, I don’t.”

OLLI REHN, EUROPEAN COMMISSIONER FOR ECONOMIC AND MONETARY
AFFAIRS

“I am confident we will have an agreement today on the SPV
(special purpose vehicle).

“We will have substantial discussion on the fiscal exit
strategy because it is evident that many countries need to
accelerate fiscal consolidation. Some are in the process of
doing so, such as Spain and Portugal.”

“I concur with Jean-Claude Juncker that it is the pace of
evolution (of the euro exchange rate) and not the level that is
of concern.”

Asked if Hungary is becoming a new Greece, he answered:
“No.”

“The main challenge is to boost confidence.”

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HIGHLIGHTS-Comments from euro zone finance ministers