BRUSSELS (MNI) – The following is the text of the Euro Summit
Statement following the end of the meeting:

EURO SUMMIT STATEMENT

1. Over the last three years, we have taken unprecedented steps to
combat the effects of the world-wide financial crisis, both in the
European Union as such and within the euro area. The strategy we have
put into place encompasses determined efforts to ensure fiscal
consolidation, support to countries in difficulty, and a strengthening
of euro area governance leading to deeper economic integration among us
and an ambitious agenda for growth. At our 21 July meeting we took a set
of major decisions. The ratification by all 17 Member States of the euro
area of the measures related to the EFSF significantly strengthens our
capacity to react to the crisis. Agreement by all three institutions on
a strong legislative package within the EU structures on better economic
governance represents another major achievement. The introduction of the
European Semester has fundamentally changed the way our fiscal and
economic policies are co-ordinated at European level, with co-ordination
at EU level now taking place before national decisions are taken. The
euro continues to rest on solid fundamentals.

2. Further action is needed to restore confidence. That is why
today we agree on a comprehensive set of additional measures reflecting
our strong determination to do whatever is required to overcome the
present difficulties and take the necessary steps for the completion of
our economic and monetary union. We fully support the ECB in its action
to maintain price stability in the euro area. Sustainable public
finances and structural reforms for growth

3. The European Union must improve its growth and employment
outlook, as outlined in the growth agenda agreed by the European Council
on 23 October 2011. We reiterate our full commitment to implement the
country specific recommendations made under the first European Semester
and on focusing public spending on growth areas.

4. All Member States of the euro area are fully determined to
continue their policy of fiscal consolidation and structural reforms. A
particular effort will be required of those Member States who are
experiencing tensions in sovereign debt markets.

5. We welcome the important steps taken by Spain to reduce its
budget deficit, restructure its banking sector and reform product and
labour markets, as well as the adoption of a constitutional balanced
budget amendment. Strictly implementing budgetary adjustment as planned
is key, including at regional level, to fulfil the commitments of the
stability and growth Pact and the strengthening of the fiscal framework
by developing lower level legislation to make the constitutional
amendment fully operative. Further action is needed to increase growth
so as to reduce the unacceptable high level of unemployment. Actions
should include enhancing labour market changes to increase flexibility
at firm level and employability of the labour force and other reforms to
improve competitiveness, specially extending the reforms in the service
sector.

6. We welcome Italy’s plans for growth enhancing structural reforms
and the fiscal consolidation strategy, as set out in the letter sent to
the Presidents of the European Council and the Commission and call on
Italy to present as a matter of urgency an ambitious timetable for these
reforms. We commend Italy’s commitment to achieve a balanced budget by
2013 and a structural budget surplus in 2014, bringing about a reduction
in gross government debt to 113% of GDP in 2014, as well as the foreseen
introduction of a balanced budget rule in the constitution by mid 2012.

Italy will now implement the proposed structural reforms to
increase competitiveness by cutting red tape, abolishing minimum tariffs
in professional services and further liberalising local public services
and utilities. We note Italy’s commitment to reform labour legislation
and in particular the dismissal rules and procedures and to review the
currently fragmented unemployment benefit system by the end of 2011,
taking into account the budgetary constraints. We take note of the plan
to increase the retirement age to 67 years by 2026 and recommend the
definition by the end of the year of the process to achieve this
objective.

We support Italy’s intention to review structural funds programs by
reprioritising projects and focussing on education, employment, digital
agenda and railways/networks with the aim of improving the conditions to
enhance growth and tackle the regional divide. We invite the Commission
to provide a detailed assessment of the measures and to monitor their
implementation, and the Italian authorities to provide in a timely way
all the information necessary for such an assessment.

Countries under adjustment programme

7. We reiterate our determination to continue providing support to
all countries under programmes until they have regained market access,
provided they fully implement those programmes.

8. Concerning the programme countries, we are pleased with the
progress made by Ireland in the full implementation of its adjustment
programme which is delivering positive results. Portugal is also making
good progress with its programme and is determined to continue
undertaking measures to underpin fiscal sustainability and improve
competitiveness. We invite both countries to keep up their efforts, to
stick to the agreed targets and stand ready to take any additional
measure required to reach those targets.

9. We welcome the decision by the Eurogroup on the disbursement of
the 6th tranche of the EUIMF support programme for Greece. We look
forward to the conclusion of a sustainable and credible new EU-IMF
multiannual programme by the end of the year.

10. The mechanisms for the monitoring of implementation of the
Greek programme must be strengthened, as requested by the Greek
government. The ownership of the programme is Greek and its
implementation is the responsibility of the Greek authorities. In the
context of the new programme, the Commission, in cooperation with the
other Troika partners, will establish for the duration of the programme
a monitoring capacity on the ground, including with the involvement of
national experts, to work in close and continuous cooperation with the
Greek government and the Troika to advise and offer assistance in order
to ensure the timely and full implementation of the reforms. It will
assist the Troika in assessing the conformity of measures which will be
taken by the Greek government within the commitments of the programme.
This new role will be laid down in the Memorandum of Understanding. To
facilitate the efficient use of the sizeable official loans for the
recapitalization of Greek banks, the governance of the Hellenic
Financial Stability Fund (HFSF) will be strengthened in agreement with
the Greek government and the Troika.

11. We fully support the Task Force on technical assistance set up
by the Commission.

12. The Private Sector Involvement (PSI) has a vital role in
establishing the sustainability of the Greek debt. Therefore we welcome
the current discussion between Greece and its private investors to find
a solution for a deeper PSI. Together with an ambitious reform programme
for the Greek economy, the PSI should secure the decline of the Greek
debt to GDP ratio with an objective of reaching 120% by 2020. To this
end we invite Greece, private investors and all parties concerned to
develop a voluntary bond exchange with a nominal discount of 50% on
notional Greek debt held by private investors. The Euro zone Member
States would contribute to the PSI package up to 30 bn euro. On that
basis, the official sector stands ready to provide additional programme
financing of up to 100 bn euro until 2014, including the required
recapitalisation of Greek banks. The new programme should be agreed by
the end of 2011 and the exchange of bonds should be implemented at the
beginning of 2012. We call on the IMF to continue to contribute to the
financing of the new Greek programme.

13. Greece commits future cash flows from project Helios or other
privatisation revenue in excess of those already included in the
adjustment programme to further reduce indebtedness of the Hellenic
Republic by up to 15 billion euros with the aim of restoring the lending
capacity of the EFSF.

14. Credit enhancement will be provided to underpin the quality of
collateral so as to allow its continued use for access to Eurosystem
liquidity operations by Greek banks.

15. As far as our general approach to private sector involvement in
the euro area is concerned, we reiterate our decision taken on 21 July
2011 that Greece requires an exceptional and unique solution.

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