Eurogroup President Jeroen Dijsselbloem will strive to strengthen the EU Banking Union, despite recent calls to loosen regulation in response to bank share volatility in in global markets, he told the Economic and Monetary Affairs Committee on Thursday. “There should be no doubt of the European Union’s determination to apply these rules”, he said in his capacity as Eurogroup President and chair of the Economic and Financial Affairs Council (ECOFIN).
The EU’s Bank Recovery and Resolution Directive, which came into force at the beginning of 2015, sets a new common framework across the EU on how troubled banks should be dealt with. Mr Dijsselbloem said that since the global crisis, there had been significant progress in raising capital buffers and strengthening supervision over banks. “There are still issues with banks, but they are in much better shape”, he said.
A key legacy issue of the global crisis is the portfolio of non-performing loans held by many banks in some countries. “There is no magic stick to make those disappear, but we need to gradually build those down and make sure our banks are open for business”, he said.
Eurogroup President bullish on Eurozone economy
Despite the recent volatility on global stock markets, the Eurozone is emerging from the global economic crisis, said Mr Dijsselbloem, who cautioned against allowing memories of the global economic downturn to cloud the economic outlook. Taking a bullish view of its economy, he said that the zone was “moving out of the crisis” and pointed to falls in the deficit, government debt and structural reforms.
Challenged by one MEP about the strength of his outlook, Mr Dijsselbloem said his assessment was not determined by the turmoil on the markets in recent weeks. “Somewhere, the crisis is alive in our heads and very little has to happen in Europe and we are in crisis again,” he said.
Call for Greece to pursue reforms
Mr Dijsselbloem also urged Greece to pursue the reforms it pledged to undertake as part of its bailout programme. “Although the quality of the reforms to be implemented is our main concern, the authorities should now shift into high gear so that negotiations can be finalised as soon as possible”, he said.
“I very much realize that some of the reforms necessary are politically difficult for society, but it is of prime importance to implement what was agreed in the summer of 2015”, he added.
Mr Dijsselbloem also praised Cyprus which will exit its EU loans programme at the end of March. Cyprus had not requested any further financing, and “I am confident the country will be able to stand on its own feet again”, he said
Combating tax avoidance: a Dutch Presidency priority
In his capacity as ECOFIN-chair, Mr Dijsselbloem said The Netherlands would prioritise legislation on corporate tax avoidance during its six-month presidency and aim to strike a deal on the anti-tax avoidance package in May.