On Tuesday 23 January, the European finance ministers gave a positive assessment of the progress made in the implementation of the action plan to reduce the stock of non-performing loans (NPL), on the basis of a report presented by the European Commission (see EUROPE 11942).
Arriving at the meeting of the Economic and Financial Affairs Council, the French minister, Bruno Le Maire, said that as regards NPL, much had been done. “We have to continue at the same pace and if we can go even further, so much the better”, he said. The Portuguese minister made a similar observation, arguing the need to balance the speed at which existing stocks are being reduced.
Germany, however, generally favours speeding up the reduction efforts. “It is not a uniform challenge”, said the German finance minister, Peter Altmaier, stressing the considerable gaps between member states. Without wishing to “name and blame publicly”, it is important that we get an overview of the situation in each member state, he said.
“We have been pushing hard, some say too hard”, on banks that had high NPL ratios, said the Vice-President of the European Central Bank (ECB), Vítor Constâncio. He explained that the aim is not to achieve rates of 0%, as banking activities are risky by their nature and it is normal to have some NPL on banks' balance sheets.
At the meeting, reference was made to the “confusion” surrounding the draft addendum to the ECB's guidelines, published in October of last year, setting out funding requirements to apply only to loans newly classified as non-performing with effect from 1 January 2018.
This draft addendum attracted a barrage of criticism - most notably from the Italian Minister, Pier Carlo Padoan - and was interpreted as laying down automatic rules applicable to all banks, which would be overstepping the ECB's mandate (see EUROPE 11899). (Original version in French by Marion Fontana)