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Greece in line for more help, Dijsselbloem tells MEPs

05-09-2013

It is "realistic to assume that additional support will be required for Greece beyond the programme", Eurogroup President Jeroen Dijsselbloem told the Economic and Monetary Affairs Committee on Thursday. But it is too early to speculate on the exact details, he later said in reply to MEPs' questions. The hearing also focused on the nascent banking union, the recently-issued country-specific recommendations, and the urgent need to tackle unemployment.

MEPs promptly picked up on Mr Dijsselbloem's opening comments on Greece, asking for information on when the next bailout could be decided, what extra conditions could be imposed on the country, and what specific purposes the loan would be designed to meet. Mr Dijsselbloem replied that the "additional support" he had referred to would not necessarily be a loan and that it was too early to go into details since the Eurogroup still needed to evaluate the progress being made. Asked for examples of what instruments of assistance could be provided other than loans, Mr Dijselbloem again replied that it was too early to speculate on details.

Many MEPs asked Mr Dijsselbloem for his views on the banking union being set up, particularly the bank recovery and resolution pillar. They pressed him for an assurance that the banks themselves would have to pitch in before recapitalisations with public money could be considered. He several times confirmed that this was indeed the case. Questions were also asked about how the bank asset quality reviews would be executed.

MEPs, mostly from the left, warned Mr Dijsselbloem and the Eurogroup that there was a risk of missing the wood for the trees when it came to current signs of a return to economic growth. They warned that although growth was returning, the risk of a decade of joblessness remained. They also cautioned that debt levels were again rising, due to the effects of the recession, and that SMEs across the Eurozone still faced significant interest rate disparities when applying for loans.