I chaired today’s Eurogroup meeting in an acting capacity, following the departure of Paschal Donohoe, who as you know has taken up a new role at the World Bank.
I take this opportunity to recognise – as many have already done – his years of dedicated service to the Eurogroup. Paschal’s drive, energy and contribution to the Eurogroup’s collegial spirit took us through the end of the pandemic, the energy crisis caused by Russia’s war of aggression in Ukraine and the new challenges from across the Atlantic.
I will be chairing the Ecofin for six months, starting in January, but chairing this Eurogroup was just a one-off.
Let me briefly report on the Eurogroup meeting today.
We started our agenda with a discussion of the euro area economy, together with the IMF’s Europe Director, Alfred Kammer.
The euro area has shown remarkable resilience, considering the specific shocks it has faced in recent years. We have managed to sustain positive growth, have kept unemployment at record lows and kept inflation on target. Nevertheless, the security situation remains the most serious challenge, also for the economy. There are well-known barriers for us to overcome if we are to rekindle economic dynamism while putting our budgets on a sound footing.
Colleagues reacted on certain elements – among others the issue of centralized supervision, our fiscal rules and the difficulties of addressing needs for investments in defence with a tight budgetary context.
We took good note of all these interventions today and I am sure that these topics will be discussed within the appropriate preparatory bodies.
There is consensus that we need to effectively implement the new Economic Governance Framework which ensures fiscal sustainability, while at the same time promoting the investments and reforms necessary to address our common challenges.
Today was a valuable opportunity to exchange with the IMF on the priorities for the euro area ahead of their formal consultation and recommendations in June.
We moved on to budgetary coordination, with our regular exercise to discuss draft budgetary plans, the budgetary situation and prospects in the euro area as a whole.
The draft budgetary plans are a cornerstone of fiscal policy coordination within the Eurogroup. As customary, we adopted a statement, which has been published.
We agreed with the Commission that a broadly neutral fiscal stance for 2026 in the euro area is appropriate, with restraint in current expenditure in some high debt countries, offset by an increase in investment spending, including for defence.
We also discussed the country-specific assessments, based on the net expenditure growth indicator.
We welcomed the draft budgetary plans considered compliant with the net expenditure path recommended by the Council. We also reaffirmed our strong commitment to sound public finances, while supporting sustainable economic growth. Based on the Commission’s assessment, three draft budgetary plans are at risk of non-compliance and two at risk of material non-compliance.
While noting different risks in terms of fiscal sustainability, the Eurogroup invites these member states to ensure, within their budgetary process, compliance with the requirements of the Stability and Growth Pact.
Two member states, Spain and Belgium, have not yet submitted a draft budgetary plan and are invited to do so as soon as possible. The Eurogroup stands ready to assess these plans on the basis of Commission Opinions once they are available.
Today, the Eurogroup also launched the process for selecting a successor to the ECB Vice President Luis de Guindos whose mandate will expire at the end of May 2026. The ECB Vice President is appointed by the European Council, acting on a recommendation from the Council, and after it has consulted the ECB and the European Parliament. The selection of the candidate recommended by the Council takes place at the Eurogroup. Today we have set the deadline for candidacies in early January which would allow the Eurogroup to deal with the matter at its meeting in January.
Today, we also elected Paschal’s successor as President of the Eurogroup. I am very pleased to announce that the Eurogroup has a new President – the term of Kyriakos Pierrakakis – which is 2.5 years – will begin tomorrow, in other words 12 December 2025. I will invite Kyriakos to say a few words at the end of the press conference. But first, let me just say that we had 2 excellent candidates – both very competent, experienced ministers and highly regarded members of the Eurogroup. I would like to thank Vincent Van Peteghem for his interest in and commitment to the work of the Eurogroup.
I am sure I do not have to introduce Kyriakos to you. Let me just say that his constructive contributions to our work have been highly valued by colleagues. I have no doubt that he will make an excellent President of the Eurogroup and wholeheartedly wish him every success in this post.
Now that we have debriefed you on the Eurogroup meeting, it is time for me to hand over to the new Eurogroup President who would like to say a few words. So, Kyriakos, congratulations again.
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