Moscovici discussing ‘concrete proposals’ with Greece

EU commissioner says talks must intensify with Greece to unlock €7.2bn in loans

European economics commissioner Pierre Moscovici warns that Ireland remains vulnerable to economic shock

European economics commissioner Pierre Moscovici warns that Ireland remains vulnerable to economic shock

Pierre MoscoviciGreece

Amid doubt over Greece’s capacity to make €1.6 billion in loan repayments to the IMF next month without a deal, Mr Moscovici said in Dublin that talks must intensify with the country to unlock €7.2 billion in suspended bailout loans.

“We still have a way to go if we want an agreement,” he told reporters before a speech on Ireland’s recovery

“We are aware of the liquidity problems in Greece. This is why it is so important that the negotiations speed up.”

There was confusion yesterday when the finance ministry in Athens said bank transaction and ATM levies were no longer under discussion with international lenders, an intervention which came only hours after finance minister Yanis Varoufakis said such measures were in play.

However, Mr Moscovici insisted there was no “plan B” for Greece, saying any country’s departure from the euro would undermine the currency union.

“Of course if one country was to leave the euro zone then the nature of the euro would be damaged.”

External shock

In a speech to the Institute of International and European Affairs, he warned it would be “wrong and risky” to ignore the legacies of the crisis, notably the high private and public debt. “As a small and extremely open economy Ireland is more exposed to external developments, both positive and negative.”

Mr Moscovici, who met with Minister for Finance Michael Noonan and Tánaiste Joan Burton, said Ireland’s recovery demonstrated that fiscal reforms pay off. However, he said it would be premature for Ireland to say mission accomplished. “When tailwinds are more favourable it’s not the moment to stop or to back-track.”

Citing policy recommendations issued in Brussels a fortnight ago, he said “we are not proposing that Ireland stick to expenditure plans no matter what”.

“In line with common practice prevailing in other EU countries, we are recommending that expenditure plans be changed only in truly exceptional circumstances.”

Cost-effective services

“Budget overruns have occurred systematically over the past few years, and pressures continue to build up. Public expenditure on healthcare is comparatively high among EU countries even though population health outcomes are by and large no better.

“Some efficiency gains have been achieved in the past few years, but the challenges remain significant. At this stage the low-hanging fruits have already been picked, and deeper structural reforms are necessary in order to provide quality healthcare to the population at an affordable cost to society.”

Calling for further efforts to tackle non-performing bank loans, he said legacy challenges remained “important” in the banks. “Poor lending practices and insufficient record-keeping and exchanges of information set the stage for the banking crisis.

“A central credit register is a key tool to ensure adequate supervision, credit underwriting and risk management. Yet progress towards its establishment has been slow.”