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CNBC Transcript: Interview with Pierre Moscovici, European Commissioner for Economic & Financial Affairs, Taxation and Customs

Following are excerpts from a CNBC interview with Julia Chatterley, and Pierre Moscovici, European Commissioner for Economic & Financial Affairs, Taxation and Customs.

On the markets..

JC: You say we're not in a position we where back in 2007/2008 but for some of these banks, actually that's where their share prices are now, so what's going on? What are investors think that they're seeing that you guys are saying, look we're not?

PM: No, there needs to be transparency on that and again when a delicate situation happens we have the means to address that, but overall

JC: Like how?

PM: Overall the quality, the asset quality review, the stress tests show obviously that the solidity of the banking sector is much higher than it used to be, so of course we must be cautious about any kind of risks but we must also keep our cool blood and face the reality as it is – no, we are not in the situation we knew a few years ago. No, we are not back there. So we won't be back there because we have all the tools to address any kind of situation now in the Eurozone.

JC: Do you think the role of the bail-in that came into play in January of this year, is actually playing into investors concerns here because bond holders are going, hang on a second, actually in a bad situation we could be bailed-in, it just seems there is a lot of uncertainty and this is another factor.

PM: No I don't want to enter too much comment about the psychology of the markets, I understand that the markets are concerned about what they have to work to watch, but we are concerned with this volatility but our message is clear, the fundamentals as well as the real economy and the financial economy of the banking sector are solid enough.

On Europe..

PM: Inside Europe we are addressing all the issues and situations that we could have to face. On Greece I would say that we are making good progress in the negotiations and the implementation of the programme and I am reasonably optimistic that we can conclude the first review of the programme before Easter because we've made good progress, we're not yet there, we need to have some more progress so that our mission chiefs can go back to Athens, but the last session of talks was, I would say, as positive as possible in a constructive mood.

On Portugal we had to discuss and to find an opinion about the draft budgetary plans, it had been changed by additional measures so we are not now in a situation of particularly serious risk of non compliance, this is why we didn't reject that budget but we are still watching risks and today we asked the Portuguese authorities to commit to take measures if necessary so that the budget, finally is compliant, and we'll have to come back on that I think before May. Spain, you know what the situation is, that's democracy, we're waiting for a government, we know that we will have a gap and that we will have to address the situation, but overall we are in our normal procedures, there is no risk for the Euro area as a whole. It just proves that the tools that we have in our hands are efficient and are capable of convincing governments to make moves, to make reforms when those reforms are necessary and globally speaking there is still a huge need for fiscal consolidation in a way which is not adverse to growth. In some countries, because the average fiscal stance is rather positive in the Eurozone and there is still a huge need of structural reform to make our economies even more competitive and productive than they are today.

JC: And the markets today are warning that those things absolutely need to continue?

PM: Yes, and we fully agree with that, but we also ask for rationality, to look at the situation as it is again, I truly believe that our forecasts don't have to be changed and that we have the tools to address the situation, that we must handle that with very strong determination and cool blood