HIGHLIGHTS-EU finance ministers, central bankers’ meeting

MADRID, April 17 (BestGrowthStock) – The following are comments by
European Union finance ministers, central bankers and other
officials on Saturday in connection with their meeting in
Madrid.

To see comments from Friday, click on [ID:nLDE63F0CC]

GREEK FINANCE MINISTER GEORGE PAPACONSTANTINOU

On national procedures needed to approve Greek aid:

“In the Eurogroup we went around the table to see how
countries are doing in terms of the national moves that they
have to make. Some have already moved. Some do not need to do
much more than simply make a decision. Others that need to go to
parliament informed us of the length of time that is necessary,
which is one week, two weeks maximum. In one country, the
Netherlands, there has already been a discussion in parliament
and tacit approval. So we are quite comfortable that once the
framework is in place, meaning the programme together with the
financing elements, we will be able to move very fast.”

On plans for a dollar-denominated bond issue:
“We have pre-announced in 2009 that we would be doing a
roadshow and at some point, a global (dollar bond) issue. Both
of these things remain on the table but there have been no
decisions on either dates for a roadshow or, even more, dates or
an amount for an eventual dollar issue. This will be announced
but there are no decisions on this whatsoever. I want to make
this absolutely clear.”

On why markets have yet to show they are convinced by
progress on consolidating the Greek budget:

“The markets are increasingly focused on the medium term.
They are beginning to be convinced that our consolidation for
this year will be okay and they’re now wondering whether this
has a medium-term depth. In other words they are looking at the
dynamics of public debt. That has to do with growth and
therefore with the structural changes that you make in an
economy to make it more competitive and to allow it to grow
faster. On this second front they’ve seen some evidence but not
yet enough.”

“My second explanation is that markets are pushing to see
more detail and more specifics on the support mechanism. We’ve
gone from an important declaration of principle — that was the
heads of state — to a more specific (declaration) at Eurogroup
level, which gives all the elements, and they want to see this
being made operational. And my third explanation is of course
that there are people out there trying to make a buck.”

On Greek banking system:

“The Greek banking system is solid. The Greek banking system
has not been exposed to the kind of toxic assets that banking
systems of other countries have been. The Greek banking system
at the moment is suffering from … having to deal with the
uncertainty surrounding the conditions for sovereign borrowing
and the over-exposure of the country in the international
media.”

“In a recession, as our country is at the moment, you do
have some reduction in deposits in banks simply because firms
and households are drawing on some of their savings in order to
be able to cope with the more difficult situation.”

“In that sense, together with the clear rules that have been
extended by the ECB beyond the end of 2010, I think there is
absolutely nothing to worry about in terms of the financial
stability, liquidity or anything else in the Greek banking
system.”

ECB GOVERNING COUNCIL MEMBER NOUT WELLINK

On Basel banking rules:

“We stressed that the most important thing is to finalise
the Basel process. We have had reactions of the banking sector
to our proposals.”

“We should be very careful so as not to harm recovery by
having all these measures. We first have to see what the total
impact of all these measures is.”

“The lobbying of the banks, not only in France but also in
other countries, has started. What was said by the French
minister during the meeting was that we are biased, in the Basel
Committee, in our approach.”

“But we did not start the calibration process yet. The
conclusion that we are biased is hard to understand.”

“We do not know yet the impact of the package … we will
know that in June or July and then we will start to calibrate
the package. Only then the banks can rightly or wrongly say that
you should change some elements.”

On bank capital:

“We are trying to assess from a macroeconomic point of view
the capital needed in the banking system. Then we combine the
macro approach with a micro approach. It is a balanced,
elaborate process.”

“The banks should wait a little bit before they come with
the criticism.”

EU MONETARY AFFAIRS COMMISSIONER OLLI REHN

On budgets:

“Our intention is to reinforce peer review among the
ministers, backed by the (European) Commission, so that before
decisions which influence the whole euro area, with very
significant spillover effects, are taken, there can be a
systemic and rigourous assessment of national draft budgets
before they are presented to national parliament.”

DUTCH FINANCE MINISTER JAN KEES DE JAGER

“It is very important that crisis management and crisis
prevention is improved and enhanced.”

“We are in favour of mandatory setting up of cross-border
stability groups.”

On budget discipline:

“We do support (EU Monetary Affairs Commissioner) Olli
Rehn’s mission of improving, enhancing the mechanism the
(European) Commission and the Ecofin (EU finance ministers) have
to impose strict budget discipline in member states.

“There are possibilities of having a stricter, more powerful
approach of Europe towards imposing the Stability and Growth
Pact (EU budget rules) upon member states.”

“Maybe we even need to improve the Stability and Growth
Pact, the treaty.”

SPAIN ECONOMY MINISTER ELENA SALGADO

“The proposals on economic coordination in the EU were well
received.”

“We have prioritised regulatory and supervisory reform in
the widest sense … Financial institutions should not think of
the instruments that have been put in place as insurance
allowing them to carry out excessive risk-taking, believing that
the state will come to the rescue in future crises.”

On whether the EU would examine national budgets:

“They are not going to substitute the decisions made by
national parliaments.”

DUTCH FINANCE MINISTER JAN KEES DE JAGER

On EU budget rules:

“We need a much more stringent implementation of the
Stability and Growth Pact.”

On calls for a bank levy:

“In the Netherlands we believe there is a case for a bank
levy but it needs to be on a global level.”

ECB PRESIDENT JEAN-CLAUDE TRICHET

“We have to play our role as actively as possible” on global
regulatory reforms.
“Let’s avoid financial nationalism, we are in a single
market.”

“We have to ensure that we have a level playing field.” Not
having one would be “very damaging”.

EUROPEAN CENTRAL BANK GOVERNING COUNCIL MEMBER EWALD NOWOTNY

Asked if he backed a global bank levy:

“We’re not that far yet. First we must look at different
proposals. What is important is a level playing field.”

ITALIAN ECONOMY MINISTER GIULIO TREMONTI

Asked what he felt about talk of an international levy on
banks:

“There is no proposal, there is nothing specific.”

He declined to say what Italy’s position would be if a
formal proposal were made.

EUROPEAN CENTRAL BANK POLICYMAKER VITOR CONSTANCIO

On possible bank levy:

“The bank levy has to be assessed only after the impact
study about the Basel proposals.”

“We need to assess the overall impact of everything that is
now being studied regarding future regulation of the banking
sector. So it’s a little bit premature.”

“If governments want to go ahead with this, it should be
linked with deposit guarantee schemes and possibly used only for
restructuring and resolution problems in the banking sector
itself and not for any other purpose.”

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HIGHLIGHTS-EU finance ministers, central bankers’ meeting