Brussels, 22/01/2013 (Agence Europe) - On Monday 21 January 2013, the Eurogroup assessed progress in the bailout programmes for Ireland, Portugal, Spain and Greece.
Ireland. The eurozone congratulated the Irish government on making the initial stages of a full return to the money markets. Euro Commissioner Olli Rehn said that this demonstrated that the structural adjustment programmes work if there is strong commitment from the countries implementing them.
Portugal. The outgoing head of the Eurogroup, Jean-Claude Juncker, said that the falling yield on Portuguese bonds showed that the markets were gaining confidence in the country's ability to introduce reforms and re-finance itself. He stressed the importance of consensus in the social and political fields when the Portuguese constitutional court issues its verdict on the 2013 budget plans, which the Portuguese president has appealed against. At the start of next month, Portugal will receive €800,000 from the EFSF.
Portugal's Finance Minister Vítor Gaspar and Irish Finance Minister Michael Noonan called for an extension of the maturity on the short-term loans to their countries to spread out the repayments. Rehn said he was in favour of this for the loans from the two temporary funds (EFSF and EMSF) because it is in the interest of all the eurozone nations for countries in receipt of aid to roll over their debt unaided, but he did not comment on interest rates. Rehn said work was under way on the feasibility of Portugal and Ireland being granted special “exit aid”, which would combine preventative lending from the European Stability Mechanism (ESM) and possibly aid from the ECB's OMT programme for buying up eurozone bonds. ECOFIN will discuss the matter in March.
Spain. Next month, the EMS will disburse the second instalment of aid (slightly over €2 billion) to bail out Group II Spanish banks, whose financial and structural problems are not as serious as those of the nationalised banks. Rehn welcomed the fact that the Spanish banks' capital requirements, €40 billion, are so much lower than initially expected (€100 billion).
Greece. The introduction in January of important aspects of the bailout programme made it possible for the eurozone to decide to pay out the next instalment of aid. In a week's time, EFSF managing director Klaus Regling will pay €7.2 billion in bonds (to bail out and wind up banks) and €2 billion in cash to cover public spending requirements. (EL and MB/transl.fl)