Finance Ministers from the Euro area countries met on 11 July in order to discussed the issues related to the implementation of the decision of the European Council on a new programme for Greece and we also exchanged views on recent developments in the euro-area. Ministers commit to continue negotiating with the European Parliament the legislative proposals to reinforce economic governance in the European Union in order to agree on an ambitious reform as soon as possible.

Finance Ministers reaffirmed their commitment to safeguard finance stability in the euro area. In order to achieve this goal, they agreed to enhancing the flexibility and the scope of the European Financial Stability Facility (EFSF), lengthening the maturities of the loans and lowering the interest rates, including through a collateral arrangement where appropriate. This would be one of the measures taking to improve the euro area’s systemic capacity to resist contagion risk. In addition, they stressed the need to continue negotiating with the European Parliament the legislative proposals to reinforce economic governance in the European Union in order to agree on an ambitious reform as soon as possible. The reinforced governance should be fully operational without delay.

With regard to Greece, Finance Ministers discussed the main parameters of a new multi-annual adjustment programme for Greece. Ministers welcomed the reinforcement of monitoring mechanisms of this programme, the nomination of the board of the privatisation agency, which comprises two observers representing euro area Member States and the European Commission, and agreed to provide extended technical assistance to Greece. They also welcomed the decision by the IMF to disburse the latest tranche of financial assistance to Greece, as well as the proposals from the private sector to voluntarily contribute to the financing of a second programme, building on the work already underway.

On the other hand, Ministers have tasked the Eurogroup Working Group to propose measures to reinforce the current policy response to the crisis in Greece. The Eurogroup Working Group will explore the modalities for financing a new multi-annual adjustment programme, steps to reduce the cost of debt-servicing and means to improve the sustainability of Greek public debt. This reinforced strategy should provide the basis for an agreement in the Eurogroup on the main elements and financing of a second adjustment programme for Greece shortly. Besides, the European Central Bank confirmed that a credit event or selective default should be avoided. Ministers recognised the need for a broader and more forward-looking policy response to assist the government in its efforts to bolster debt sustainability and thereby safeguard financial stability in the euro area.