1 (2)
25 September 2012

Joint Statement of the Ministers of Finance of Germany,
the Netherlands and Finland
We met today at Königstedt Manor outside Helsinki to discuss the topical issues
of the Eurogroup and the ECOFIN Council. Our talks were conducted in a very
positive and cordial atmosphere.
We welcome the recent positive reviews of the Irish and Portuguese EU/IMF
programs. We look forward to the Troika report on the next review of the Greek
EU/IMF program and the completion of the agreed fiscal and structural policy
measures that constitute an important precondition for a successful review. We
agreed that the implementation of the European Semester, including budgetary
discipline and targets, in all countries remains key to ensuring financial stability;
the ESM and the other crisis mechanisms can only play a supplementary role to
these policies that are decided at the national level. National reform agendas of
some Member States are in this context especially important. In this respect we
encourage Spain to continue its national reform agenda in due time.
We agreed on the profound importance of the work that is currently being
undertaken by the President of the European Council, in close collaboration with
the President of the Commission, the President of the Eurogroup and the
President of the ECB, to develop a precise and time-bound road map for the
achievement of a genuine Economic and Monetary Union. The report will cover
three frameworks (financial, budgetary and economic policy) and the
strengthening of democratic legitimacy and accountability. To fulfil its role in
preparing the Euro Summit meetings, the Eurogroup has to work proactively on
these issues.
Regarding financial markets topics, we touched upon the issue of a Single
Supervisory Mechanism. We took note of the constructive political discussion that
took place at the Informal Ecofin in Nicosia on Sept. 15. We agreed that it is
important to achieve rapid progress on this issue, but it cannot happen at a cost
of the quality of the new supervision.

Media and Communications Unit. Ministry of Finance
PO BOX 28, FI-00023 Government, FINLAND
Tel +358 295 16001, telefax +358 9 160 34755
vm-viestinta@vm.fi, www.financeministry.fi

2 (2)

Specifically, we discussed the governance, independence, decision making and
accountability of the new Single Supervisory Mechanism involving the ECB. The
new framework has to ensure that the ECB can continue to conduct effectively
and independently its current tasks, and it has to take into account the concerns
of non euro area Member States regarding governance of the new supervision.
This requires appropriate governance structures and a clear division of
responsibilities between a new ECB Supervisory Council, which may include
representatives from all Members States, and the Governing Council of the ECB.
To ensure the accountability of the new Supervisory Council, it should report on
the stability situation and its decisions to European Finance Ministers (Ecofin
Council or Eurogroup+) as well as provide reports to the European Parliament
and national Parliaments.
Regarding longer term issues, we discussed basic principles for enabling direct
ESM bank recapitalisation, which can only take place once the single supervisory
mechanism is established and its effectiveness has been determined. Principles
that should be incorporated in design of the instrument for direct recapitalization
include: 1) direct recapitalisation decisions need to be taken by a regular decision
of the ESM to be accompanied with a MoU; 2) the ESM can take direct
responsibility of problems that occur under the new supervision, but legacy
assets should be under the responsibility of national authorities; 3) the
recapitalisation should always occur using estimated real economic values; 4)
direct bank recapitalisation by the ESM should take place based on an approach
that adheres to the basic order of first using private capital, then national public
capital and only as a last resort the ESM.
With a view of the work on the financial framework, we look also forward to the
upcoming report by the Commission’s high-level expert group, chaired by
Governor Erkki Liikanen, on possible reforms to the structure of the EU banking
sector.
We discussed issues pertaining to the start-up phase of the European Stability
Mechanism, including the upcoming inaugural meeting of the ESM Board of
Governors on 8 October.
_________________