Good afternoon and welcome to this press conference. We briefly discussed the economic situation in the Eurozone, I will let Commissioner Moscovici say more about that. We had a follow-up discussion on the issue of structural reforms, in particular on the tax wedge on labour, which is becoming a test case for us on how we can strengthen our cooperation in the field of structural reforms, how can we push the reform agenda jointly in the Eurozone.
Today we discussed and have decided to develop the instrument of benchmarking for the tax burden on labour to follow and stimulate developments in countries of the Eurozone on this issue.
It has to do with competitiveness and the functioning of the labour market, and there is a lot of potential there for us to improve. We will both benchmark on the EU average and also closely follow how we do in relation to the OECD average. There is a statement which will be distributed to you on the issue of benchmarking structural reforms and specifically on the tax wedge on labour, so I will refer for time’s sake to that statement.
On Greece, we took stock of latest developments, we were informed by our Greek colleague, who is of course part of the caretaker government. He confirmed that preparatory work of the caretaker government is thus continuing and that implementation, for as far as it does not require further parliamentary decisions, will continue. All of that, of course, in order to lose as little time as possible. From our perspective we can of course only respect the democratic process and will await the election results. Timely implementation of reforms and next steps to take, after the election, is of course crucial and time is limited.
Then on Cyprus, the institutions briefed us on the positive outcome of the seventh review. We all welcomed the progress. Economic recovery is under way in Cyprus and it’s actually stronger than was expected at the beginning of the year, picking up quite strong fiscal out-turns also above forecast, and the determined reform implementation by the Cypriot government is bearing its fruit.
We endorsed in principle an updated MoU and the eighth ESM disbursement, perhaps Klaus can say more on that. National procedures can be launched on this and hopefully we will have formal approval early in October.
Finally on the Banking Union, the Commission very sternly spoked to us on the implementation process of both BRRD and the IGA. Luckily, all ministers could report progress on this. Progress is being made in different countries; only last week in the Netherlands, parliament agreed to the BRRD, and the IGA was also ratified in the senate, so we are also doing our part. This is also the case in other member states and it’s crucial of course because these elements need to be fully operational on the 1st of January 2016.
Those were the key issues for me for now. Thanks for your attention and I pass the floor to Commissioner Moscovici and MD Regling.
Compliments of the Council of the European Union