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Transcript of interview with Kalin Anev Janse, Member of the ESM and EFSF Management Board, responsible for Funding, Asset Liability

Management and Lending, and ESM Secretary General

Published by Market News International (MNI)

27 May 2016

By Nick Shamim
 

Interview with Klaus Regling, Managing Director, ESM

Published in Corriere della Sera (Italy)

6 May 2016

Conducted by Francesca Basso
 

Transcript of interview with Klaus Regling, Managing Director, ESM

Bloomberg TV, “Pulse”, 27 April 2016

Interviewer: Hans Nichols
 

Accession of new ESM members

In line with the preamble of the ESM Treaty, EU Member States should become an ESM Member with full rights and obligations following their adoption of the euro. On such basis, applications for accession to the ESM, including the related technical terms and adaptations to the ESM Treaty, are to be approved by the ESM Board of Governors. Subsequently, the acceding ESM Member is to ratify the ESM Treaty.

“The EFSF fulfilled its entire funding needs for the second quarter with today’s dual-tranche transaction. In reaction to investor feedback, we decided to offer two new liquid benchmarks bonds. Both trades received very strong demand, and we decided to raise the entire amount of the EFSF’s second quarter funding needs in this transaction,” said Siegfried Ruhl, EFSF Head of Funding.

The Eurogroup welcomes that a full staff-level agreement has been reached between Greece and the institutions. Also, the Eurogroup notes with satisfaction that the Greek authorities and the European institutions have reached an agreement on the contingency fiscal mechanism, which is in line with the Eurogroup statement adopted on 9 May in particular as regard the possible adoption of permanent structural measures, including revenue measures, to be agreed with the institutions. It therefore provides further reassurances that Greece will meet the primary surplus targets of the ESM programme (3.5% of GDP in the medium-term), without prejudice to the obligations of Greece under the SGP and the Fiscal Compact. 

The Eurogroup also welcomes the adoption by the Greek parliament of most of the agreed prior actions for the first review, notably the adoption of legislation to deliver fiscal parametric measures amounting to 3% of GDP that should allow to meet the fiscal targets in 2018, to open up the market for the sale of loans and to establish the agreed Greek Privatisation and Investment Fund that should operate in full independence. The Eurogroup mandates the EWG to verify in the next few days the full implementation of the outstanding prior actions on the basis of an assessment by the institutions, in particular the corrections to the legislation on the opening up of the market for the sale of loans, and on the pension reform, as well as the completion of all prior actions related to the government pending actions in the field of privatization. 

Following the full implementation of all prior actions and subject to the completion of national procedures, the ESM governing bodies are expected to endorse the supplemental MoU and approve the disbursement of the second tranche of the ESM programme. The second tranche under the ESM programme amounting to EUR 10.3 bn will be disbursed to Greece in several disbursements, starting with a first disbursement in June (EUR 7.5 bn) to cover debt servicing needs and to allow a clearance of an initial part of arrears as a means to support the real economy. The subsequent disbursements to be used for arrears clearance and further debt servicing needs will be made after the summer. The disbursements for arrears clearance will be subject to a positive reporting by the European Institutions on the clearance of net arrears. The additional disbursement for debt servicing needs will be subject to milestones related to privatization, including the new Privatization and Investment Fund, bank governance, revenue agency and energy sector to be assessed by the European institutions and verified by the EWG and the ESM Board of Directors. 

In line with the 9 May Eurogroup statement, and in view of the forthcoming full implementation of all the prior actions by Greece and completion of the first review, the Eurogroup considered today the sustainability of Greek public debt.