BRUSSELS (Reuters) - Euro zone finance ministers will try to flesh out plans to reinforce the single currency, but their talks in Brussels may do little more than highlight the limitations of last month’s deal to help indebted states and banks.
Decisions on banking supervision, how to use euro zone bailout money, aid to Spain and Cyprus and whether to grant concessions to Greece are likely to take months to finalize, while pressure for action is growing.
Following are comments by ministers and officials ahead of Monday’s talks:
“We will talk about Spain in the Euro group today. We take stock on the negotiations of the Spanish banking recapitalization. The negotiations are on a good track, I think we will be able to agree on a binding framework and timing.
“We will also get the first reports from the missions to Greece and Cyprus but I don’t think we will make decisions today but nobody expected that.
“We will also talk (...) about how we can create a European banking supervision which, once it is in place but not before, would give the possibility for direct access of banks to the European emergency fund. That will take time, it’s complex, that’s not easy to create but we will work on that.”
“Finland is deeply committed to the euro and to saving the euro. We have had low interest rates, stable prices, and that has been good for Finnish SMEs and pensioners and consumers.
“But of course one of the tasks of the government is to prepare for different scenarios, because the situation is so uncertain that no one can know what happens tomorrow.
“We prepare different scenarios, different paths for the future, but that does not reduce that we are very committed to the joint currency and want to solve the crisis as soon as possible.”
“Finland is a country which has stuck to joint rules, one of the very few countries which have done so.”
“In principle we are studying the possibility of creating so called ‘companies for the management of real estate assets’ which would receive damaged assets at prices based on reasonable valuations and this would be a way of cleaning up and animating the activities of banks in their fundamental business which is capturing deposits and making loans.”
“This evening we are going to look at two basic issues, firstly Spain’s memorandum, i.e. the conditions for the financial assistance process and then the excessive deficit procedure and there the Commission has given its proposal, a new path of fiscal adjustment, and we will be analyzing the implications of that. From the Spanish point of view we will also be explaining the measures that we are taking and that we are going to take.”
“In the case of the memorandum there is already the basis for important agreements of a deal on many subjects, which we hope to do today, this afternoon and evening, and afterwards we should reach a definitive agreement on the 20th of this month.”
“There are conditions of two types, some which affect the institutions, referring to the injection of capital, they have to carry out a process very similar to that which has been asked of other institutions which have received capital injections, of public aid, and then generic conditions from the point of view of the whole financial sector, which are basically conditions of provisions, transparency.”
“People as you know are quite concerned about Spain... so the main decision-making process today and indeed tomorrow (EU finance ministers’ meeting) will be about Spain, I understand.”
“First of all, I’m happy that we have a coalition in Greece now, which wants to negotiate with Europe and is willing to enact reforms. I think that’s the most important thing.
“We have to see how realistic the things are that we want from Greece. I think we can accommodate Greece, but Greece must also know that it’s not a one-way street. Greece has to enact a series of reforms that we have demanded, we will need to hear the Greek finance minister about this.”
“Conditions will have to be met with regards to the recapitalization of banks, they have to be made fit for the future and there has to be restructuring. We will find a common position in a memorandum that we will write now. There have to be some conditions.”
“Debates about personnel are always difficult in the European Union, because different challenges have to be met. We have to find a solution quickly. In a time when so many topics are on the agenda it’s not good to waste time with personnel debates. I think it’s important from an agenda point of view to assign the ECB directors. The term of the head of the Euro group is coming to an end. It shouldn’t be too difficult to come to a decision today.”
“There is a proposal, notably for Spain. It must be examined, I believe, in a positive manner. The proposals on the table seem to me to be able to lead to consensus.”
“We will discuss options for applying the European Stability Mechanism (ESM). From now, its implementation is possible, it’s just a question of days. I also want to make good progress on banking supervision, as we wait for the Commission’s proposal in September. I think it’s important to move fast. Our hope is to have a working mechanism in place by the end of 2012, and at the same time to advance on the direct recapitalization of banks that we want.”
“France has made no demands in this regard. Today, we will proceed with a package of different nominations which includes the president of the Euro group. It’s necessary, because if we have other meetings perhaps in July, there has to be a president and the mandate of Jean-Claude Juncker ends on July 16.
“So it’s indispensable that we find an agreement tonight, and what France wants is an extension of Jean-Claude Juncker’s mandate if he is able to accept. After that, it’s for him to say how long he’d like to remain.”
“I remain extremely confident with the decisions taken at the last European Council. I think the fundamental decisions laid a solid basis. It now remains to flesh them out, and flesh them out quickly. That is the job of this Euro group today, and possibly for another Euro group later this month - to make progress on Spain, on the mechanism requested by (Italian Prime Minister) Mario Monti to face the situation there, even if the fundamentals of the Italian economy are solid. To make progress on Greece, and perhaps to give some more time to some or to others.”
Reporting by Adrian Croft, Gemma La Guardia, Robert-Jan Bartunek, Paul Carrel, Daniel Flynn and Charlie Dunmore in Brussels, and Sakari Suoninen in Frankfurt