EU persconferentie 26 June 2012 - QA

Informal press conference – background information

Contents

1. Economic context – some figures 2

a. Growth 2

b. Public debt 2

c. Exposures of Belgian banking sector to PIIGS 3

d. Estimated cost of Eurozone debt crisis 4

e. Profitability of financial sector 4

2. Budgetary reforms 6

a. European Semester 6

b. Six-pack and two-pack 8

3. Financial stability in Europe 10

a. EFSF & ESM 10

b. Eurobonds 13

c. European Banking Union 16

4. Regulatory reforms 17

a. Basel III and CRDIV 19

b. Crisis management ( EC Proposal of 6 June) 24

c. Shadow banking 27

d. Financial Transaction Tax (FTT) 28

e. Deposit Guarantee Schemes 32

5. Structural reforms (Volcker, Vickers & Liikanen) 35

a. Volcker and Vickers 35

b. Liikanen Group 39

1.  Economic context – some figures

a.  Growth

Economic growth in a world- and European perspective (BBP-growth, in %)

Source:Europese Commissie (mei 2012). (1)Vooruitzichten. (2)Tussen haakjes, jongste vooruitzichten NBB (11 juni 2012).

b.  Public debt

Public debt in Belgium and the Eurozone (debt in % of BBP)

Source:Europese Commissie (mei 2012). (1)Vooruitzichten. (2)Tussen haakjes, jongste vooruitzichten NBB (11 juni 2012).

Increase of public debt in the G20 (figures September 2011):
Increase of public debt G20 only for a limited part due to financial sector support.

c.  Exposures of Belgian banking sector to PIIGS

Exposure van de Belgische banksector op de probleemlanden van de eurozone (eind december 2011, in miljoen EUR, geconsolideerde situatie en ‘ultimate risk basis’)
Griekenland / Ierland / Italië / Portugal / Spanje / Totaal
1.  Directe vorderingen / 558 / 16.895 / 9.574 / 2.137 / 10.142 / 39.307
Waarvan :
ü  Overheid / 532 / 291 / 5.515 / 1.368 / 2.174 / 9.880
ü  Banken / 11 / 631 / 2.797 / 519 / 3.016 / 6.973
ü  Private sector / 16 / 15.864 / 1.221 / 250 / 4.947 / 22.299
ü  Niet-toewijsbaar / -1 / 109 / 41 / 0 / 5 / 155
2.  Andere potentiële blootstellingen (derivaten, garanties, verbintenissen) / 50 / 1.871 / 3.111 / 77 / 798 / 5.908

Bron : berekeningen en presentatie Febelfin op gegevens van de BIS en de NBB.

Toeliching bij tabel:
Bovenstaande data zijn afgeleid uit de statistieken van de Bank for International Settlements (BIS) – Situatie september 2011. De aangegeven exposure-posities betreffen de geconsolideerde bancaire situaties. Daarbij zijn de (rapporterende) banken opgenomen die hun hoofdzetel in het land in kwestie (dus hier België). Dit laatste principe heeft belangrijke consequenties voor de Belgische data (vermits de dochterondernemingen en bijkantoren van buitenlandse banken buiten de scope van de data over België vallen; de gegevens van deze instellingen maken deel uit van de rapportering door de ‘moederbank’, in het land waar die laatste is gevestigd). De BIS-data zijn uitgedrukt in USD. In de onderstaande tabel werden deze data omgerekend in EUR, aan de wisselkoers van eind december 2011. Voorts zijn de gegevens op ‘ultimate risk basis’, m.a.w. het betreft de posities waarbij het risico finaal bij de rapporterende banken ligt.

d.  Estimated cost of Eurozone debt crisis

What has been the cost for Europe of the financial assistance programmes until now?

In totaal een tussenkomst voor 4 EU-landen & 5 reddingsoperaties.

Griekenland / 2 reddingsoperaties
(23/4/2010 en 21/2/2012) / 240 mia EUR
Ierland / 21/11/2011 / 85 mia EUR
Portugal / 6/4/2011 / 78 mia EUR
Spanje / 11/6/2012 / 100 mia EUR (MAAR er gaan reeds stemmen op dat Spanje nogmaals zal moeten aankloppen. Volgens ING specialisten zou Spanje nog extra 250 mia EUR nodig hebben bovenop de 100 mia EUR – cfr berichtgeving in verschillende media)

Hoeveel heeft de eurocrisis België al gekost?

Informatie van BNP Paribas Fortis op basis van Rekenhof:

De belgische overheid heeft een blootstelling van zo'n 54.4 mia. Hiervan zijn 2.8 mia bilaterale lening aan Griekenland, 27.1 mia waarborg voor EFSF en 24.4mia waarborg voor ESM.

Eind 2011 had België al effectief 1.7 mia uitgeleend aan Griekenland.

In het ESM zal België een effectieve kapitaalbijdrage van2.8 mia moeten volstorten.

Dit is effectieve cash die België moet 'uitlenen'.

e.  Profitability of financial sector

Artikel De Tijd – 21/06/2012 - 'De limieten zijn nu echt bereikt'

Vermaerke: 'Ik laat aan de regering de wijsheid om te beslissen. Maar ik wil de aandacht vestigen op een studie van het Internationaal Monetair Fonds (IMF) van maart. Daarin staat een statistiek over de rendabiliteit van de Belgische banken. Die is in 2011 gezakt naar nul. Wij houden geen pleidooi voor een terugkeer naar een rendement van bijvoorbeeld 25 procent, maar tussen 25 procent en nul is er toch een verschil. Om een eigen vermogen te hebben, dat noodzakelijk is om de rol als financier voor de economie te vervullen, moet er toch een minimum aan rendement zijn voor de banken. Maar met al die heffingen zitten we aan de limieten.'

2.  Budgetary reforms

a.  European Semester

·  Coordinate ex ante EU & eurozone budgetary and economic policies, in line with both the Stability and Growth Pact.

·  Concrete, European Commission gives on yearly basis county-specific recommandations: EC gives policy advice for member states to finalise their draft budgets for the following year.

What is the European Semester?

The European semester is a new governance architecture, approved in September 2010, where the EU and the euro zone will coordinate ex ante their budgetary and economic policies, in line with both the Stability and Growth Pact and the Europe 2020 strategy.

The EU Semester starts with the Annual Growth Survey, in which the Commission provides a solid analysis on the basis of the progress on Europe 2020 targets, a macro-economic report and the joint employment report, and sets out an integrated approach to recovery and growth, concentrating on key measures. This applies to the EU as a whole and will then be translated into country-specific recommendations.

This will allow ex ante economic coordination at EU level while national budgets are still under preparation.

How does the European semester work?

The European semester evolves in different cycles:

·  The cycle will start each year in January when the Commission publishes the Annual Growth Survey (AGS), to be discussed by Council formations and the European Parliament ahead of the Spring meeting of the European Council in March.

·  Taking this guidance into account, the Member States will present and discuss their medium-term budgetary strategies through Stability and Convergence Programmes and, at the same time, draw up National Reform Programmes setting out the action they will undertake in areas such as employment, research, innovation, energy or social inclusion. These two documents will be then sent in April to the European Commission for assessment.

·  Based on the Commission's assessment, the Council will issue country-specific guidance by June and July and possible country-specific guidance to countries whose policies and budgets are out of line

·  Each July, the European Council and the Council of ministers will provide policy advice before Member States finalise their draft budgets for the following year. Draft budgets will then be sent by Governments to the national Parliaments, which continue to fully exercise their right to decide on budget. In other words, this new framework represents in no way a limit to the sovereignty of national parliaments.

Which were the 2012 European Commission recommendations to Belgium?

The European Commission recommends that Belgium should take action, within the period of 2012-2013, to:

1.  Implement the budget for the year 2012 to make sure the excessive deficit is corrected by 2012. Additionally, specify the measures necessary to ensure implementation of the budgetary strategy for the year 2013 and beyond.

2.  Continue to improve the long-term sustainability of public finances by curbing age-related expenditure, including health expenditure. In particular, implement the reform of pre-retirement and pension schemes and introduce measures linking the statutory retirement age with increases in life expectancy.

3.  Further increase capital of the weakest banks to underpin the strength of the banking sector so that it can play its normal role in lending to the economy.

4.  Take steps to reform the system of wage bargaining and wage indexation. As a first step, ensure that wage growth better reflects developments in labour productivity and competitiveness.

5.  Significantly shift taxes from labour to less growth-distortive taxes including for example environmental taxes. Pursue the initiated reform of the unemployment benefit system to reduce disincentives to work and strengthen the focus of employment support and activation policies on vulnerable groups.

6.  Continue to strengthen competition in the retail sector by lowering barriers to entry and reducing operational restrictions.

7.  Take measures to correct the lack of progress towards reaching the targets for reducing greenhouse gas emissions from non-ETS activities

b.  Six-pack and two-pack

Six-pack:

-Applies to EU member states;

-European legislative measures to strengthen the Stability and Growth Pact and to introduce new macroeconomic surveillance in order to strengthen the procedures to reduce public deficits and address macroeconomic imbalances. Six-pack reinforces corrective arm and may impose financial sanctions for euro area member states not fulfilling the requirements (financial sanctions only possibly for euro area member states and not for all EU member states).

Two-pack:

-will apply only to euro area member states;

-The proposed Regulation strengthening surveillance of budgetary policies in euro area Member States would require the euro area MS to present their draft budgets at the same time each year and give the Commission the right to assess and, if necessary, to issue an opinion on them.

What is the six-pack?

The EU economic governance Sixpack describes a set of European legislative measures to strengthen the Stability and Growth Pact and to introduce new macroeconomic surveillance. They aim at strengthening the procedures to reduce public deficits and address macroeconomic imbalances. The six-pack entered into force on 13 December 2011 and applies to all 27 MS with some specific rules for "euro-area Member States", especially regarding financial sanctions.

The six-pack strengthens the Stability and Growth Pact (SGP). According to the SGP Member States' budgetary balance shall converge towards the country-specific medium-term objective (MTO) and the general government deficit must not exceed 3% of GDP and public debt must not exceed 60% of GDP (or at least diminish sufficiently towards the 60% threshold). The six-pack reinforces both the preventive and the corrective arm of the Pact, i.e. the Excessive Deficit Procedure (EDP), which applies to Member States that have breached either the deficit or the debt criterion.

Financial sanctions for "euro-area Member States", not fulfilling the requirements, are imposed in a gradual way, and may eventually reach 0.5% of GDP. The six-pack introduces reverse qualified majority voting (RQMV) for most sanctions, therefore increasing their likelihood for "euro-area Member States".

Specifically, the EU six-pack relates to the following regulations and guidelines:

1.  Regulation on the strengthening of budgetary surveillance and coordination of economic policies

2.  Council Regulation regarding speeding up and clarifying the implementation of the excessive deficit

3.  Regulation on the effective enforcement of budgetary surveillance in the euro area

4.  Directive on the requirements for the fiscal framework of the Member States

5.  Regulation on the prevention and correction of macroeconomic imbalances

6.  Regulation of the European Parliament and of the European Council on enforcement action to correct excessive macroeconomic imbalances in the euro area

How does the Two-pack fits in?

There is a need for euro area Member States to go beyond the Six Pack, so as to strengthen the economic pillar of the Economic and Monetary Union. Therefore, the European Commission proposed, on 23 November 2011, two Regulations on strengthened surveillance for the euro area, building on what has already been agreed in the ‘Six Pack’.

The Commission proposed to enhance both the coordination and the surveillance of budgetary processes for all euro area Member States and especially those with excessive deficits, experiencing or at serious risk of financial instability, or under a financial assistance programme.

The proposed Regulation strengthening surveillance of budgetary policies in euro area Member States would require the euro area MS to present their draft budgets at the same time each year and give the Commission the right to assess and, if necessary, to issue an opinion on them. The Commission could request that these drafts be revised, should it consider them to be seriously non-compliant with the policy obligations laid down in the Stability and Growth Pact. The Regulation also proposes closer monitoring and reporting requirements for euro area countries in Excessive Deficit Procedure, to apply on an ongoing basis throughout the budgetary cycle.

The proposed Regulation strengthening economic and fiscal surveillance of euro area countries facing or threatened with serious financial instability would ensure that the surveillance of these Member States under a financial assistance programme, or facing a serious threat of financial instability, is robust, follows clear procedures and is embedded in EU law. According to the new rules, the European Commission could place a country under legal protection and demand a debt settlement plan and implementation of other measures.

3.  Financial stability in Europe

a.  EFSF & ESM

European Financial Stability Facility (EFSF)

- Temporary

- Lending capacity of 440 billion EUR – still remaining 248 billion EUR

European Stability Mechanism (ESM)

- Permanent

- Requires ratification of member states (opgepast Vlaanderen, Grondwettelijk hof DU)

- Lending capacity of 500 billion EUR

- Should enter into force 9 July 2012

What is the EFSF?

The European Financial Stability Facility (EFSF) is a temporary institution which was agreed upon by the countries that share the euro on May 9th 2010 and incorporated in Luxembourg on June 7th 2010. The EFSF’s objective is to preserve financial stability of Europe’s monetary union by providing temporary financial assistance to euro area Member States if needed. All financial assistance to Member States is linked to appropriate conditionality.

In order to fulfil its mission, the EFSF is authorised to:

·  issue bonds or other debt instruments on the market to raise the funds needed to provide loans to countries in financial difficulties.