GLOBAL CONVERSATION | Eurogroup president Mário Centeno on Brexit and EU Elections in Euro's 20th year
Founded in 1998, the Eurogroup is made up of the finance representatives of 19 EU member states – all of whom have adopted the euro as their official currency. The group ensures better coordination of economic policies, but also represent the euro in international monetary forums.
As the EU celebrates the 20th anniversary of the euro and a looming Brexit, Euronews’ business editor Sasha Vakulina sat with Eurogroup president Mário Centeno.
“Mr Centeno, it has been one year since you have taken the helm at the Eurogroup. What has been the most impressive to you over this year?”
Mário Centeno, Eurogroup President:
“We had two big tasks this year: to bring a deal to the December European Summit on the reform of the euro, it is a very impressive reform outside crisis time. And the end of the third programme (Bailout programme) for Greece. So August 20th is a very important day for the euro area as it is the date which put an end to the programme in the euro area. So the first meeting in September – for a long period of time without programme (bailout programme)”
“How significant was it to have Greece exit the bailout programme after so many years?”
“It is very important for everyone, but especially for the Greek people. Three programmes, 8 years, lots of reforms, very hard measures that we all expect to pay out in terms of growth, in terms of social cohesion. There is still a lot to do, but Greece is finally taking care of all its subjects and problems on their own. No more programmes – this is very important”
“As we said Greece was the very last country to officially exit the bailout programme. What is the stage now? Is it still the stage of recovery or is it the stage of dynamic growth?
“We are at the stage after a peak of growth in 2017, which was a very impressive period of growth for all countries. All countries growing at above 1,5 percent.
2018 saw a little bit of deceleration, some risks, some uncertainties picking up – this is totally normal in an economy, so we should not panic. But the good thing about the eurozone today is that we have the best indicators ever to deal with those fluctuations. The almost balanced budget for the whole of the euro area, the big saving that we generate in the euro area above 3 percent of GDP for the whole area, the very important coordination mechanisms that we have in place – these are all good news for us to deal with the economic fluctuations in the future. Again, 2018 saw some deceleration from the impressive growth of 2017 but still the investment rate – the latest figures for 2018 for the investment grade – showed the investment grade increasing and actually topping the pre-crisis level.”
“Looking forward to 2019 as an important year for the eurozone, how much of an impact will Brexit have?”
“It is a structural adjustment. It takes time for agents, economic agents: families, firms to adjust. And we must give them this time. It is an impact that may differ from country to country, Ireland is at the central stage, of course, and the Netherlands. But overall all euro area member states need to adjust, but especially the UK.”
“What about risks coming from trade tensions. How important are those for the economy?”
“If we go back 6 months those trade tensions were much more in the news. Fortunately, policymakers were able to get together. Important meetings occurred during the summer and those trade tensions are now reduced. And this is what brings my optimism. If we deal with those political issues having in mind that our action plan must be directed to our citizens – we will get the right answers to very complex questions. We must avoid at all times simple answers to very complex actions. Then some other movements that are not in the framework of our institutions occur and that's what we have to avoid.
But 2019 is also a year of a new political cycle. We are in the European Parliament. So a new body will take place also for the commission
“Do you think that basically the Eurozone countries will undergo some serious changes after the elections?”
“You know I am not very favourable about big machines, big changes. I think we need to go step by step. This is the only way to convey the process to citizens, to bring everyone on board of these reform processes. So I have to be totally honest – I don't expect big changes out of the elections. The more mature institutions are – the stronger the checks and balances and the stronger the stability consensus that we need to have around these institutions. So yes, this is a year of change, on a continuity of the processes that we have right now.”
“Do you see euro skepticism rising as a factor for the economic growth with the election in May?”
“It is quite paradoxical because euro is at the highest level in terms of the support of people for the euro[zone]. So yes, there are concerns, but those concerns do not mean that we are going to break up. Actually, as you know, many people bet against the odds of survival of the euro throughout the crisis. Political commitment was able to make ourselves stronger. Well, I don't really see that type of risks coming, but I don't see either big revolutions in terms of the way we deal with the institutions and that's the way I think we have to proceed.”
“Mário Centeno, thank you so much for this interview”
“Thank you, Sasha. Thank you for having me”