Statement on the decisions taken by the Euro Area Heads of State or Government at a press briefing on 21 July 2011 in Brussels
Statement by Jean-Claude Trichet, President of the European Central Bank,
Brussels, 21 July 2011
I welcome the reaffirmed commitment of Euro area Heads of State or Government to ensure financial stability of the euro area.
In today's decisions, the following six points are particularly noteworthy:
First, the agreement by the Heads of state of government to support a new programme for Greece. The new EU/IMF support programme for Greece is crucial to foster sustainable economic growth and stabilize public finances. Strict and rigorous implementation of the programme is key to ensure public debt sustainability in Greece. Besides fiscal consolidation, the privatisation programme and the agreed structural reforms are of the essence to revitalising the Greek economy over time.
Second, the decision that Member States and the Commission will mobilise all resources necessary in order to provide exceptional technical assistance to help Greece implementing its reforms.
Third, the clarification of the approach to private sector involvement in the euro area. Here, what is most important, is the recognition that Greece is in an exceptional situation and that for that reason it requires exceptional and unique solutions, but that all other euro area member countries reaffirm solemnly their inflexible determination to honour fully their own individual sovereign signature. The ECB fully shares the view that this inflexible determination is fundamental and that the credibility of all the sovereign signatures is a decisive element for ensuring financial stability in the euro area as a whole.
Fourth, the significantly enhanced flexibility in the use of the EFSF, including the intervention in the secondary markets, if warranted by exceptional financial market circumstances and risks to financial stability.
Fifth, the decision to rapidly finalise the legislative package on the strengthening of the stability and growth pact and the new macro economic surveillance framework and, in particular, the support to the Polish Presidency to reach an agreement with the European Parliament on voting rules in the preventive arm of the pact.
Sixth, we take note of the fact that the governments are supporting the new programme for Greece with a voluntary contribution of the private sector. As stated earlier, the ECB had made clear that it was advising that any contribution of the private sector should be voluntary, which is the case. The Governing Council had also made clear that it can only accept eligible collateral presented by sound counterparties. We do not prejudge at this stage what will happen to the Greek collateral. In any case, we had said that euro area governments would have to provide, if needed, the Eurosystem with a credit enhancement which would appropriately underpin the quality of securities issued or guaranteed by the Hellenic Republic pledged as collateral to the Eurosystem. This commitment has been made today.