Good evening, everyone. Let me just give you a quick summary of our July Eurogroup meeting.
We started our meeting with our annual exchange on the euro area fiscal stance for 2025, ahead of budget preparations for next year. This year’s backdrop is especially important as we now move into a revised economic governance framework. That discussion was informed by the report by the European Fiscal Board presented by Professor Niels Thygesen. It was his last meeting as chair of the European Fiscal Board, and we thanked him for all his work in recent years.
We agreed on a statement on behalf of the Eurogroup in which we concur that going forward, gradual and sustained fiscal consolidation is needed in the euro area. That said, we are all very conscious that improving the quality of public spending and safeguarding investment is going to be crucial along the way, as we try to minimise any negative impact on economic growth. Our statement reaffirms our commitment to swiftly and consistently implementing the revised economic governance framework. For 2025 – the first year when the new framework is applicable – its implementation is expected to lead to a contractionary fiscal stance for the euro area overall. We’ll review where we stand on this in our December meeting.
Today we also agreed our work programme for the months ahead, taking us to March of next year. Again, there’s a lot of focus on our work with regard to budget coordination, capital markets, the future of our currency and competitiveness.
We held an important discussion in relation to the state of convergence for those countries in the exchange rate mechanism (ERM II), and in particular on the implementation of ERM II commitments by Bulgaria. As you know, according to the institutions, Bulgaria fulfils all of the convergence criteria except for the one with regard to price stability. Bulgaria has made good progress over the last years, and we all encourage it to continue with its reform efforts towards euro adoption, which will take place once sustainable convergence with the euro area is reached.
We then concluded our agenda with a discussion on euro area competitiveness. We were joined by Enrico Letta, who kicked off our discussion with a focus on the relevant elements of his report, entitled ‘Much more than a market’. Addressing the funding gap for the EU’s investment needs is a real challenge. We heard a divergence of views with regard to this, but we also heard a lot of common ground and consensus. This is true in particular with regard to the need to absolutely accelerate all of our efforts with the capital markets union and the Eurogroup will play a central role in this. There was acknowledgement regarding the benefits of exploring EU level common actions to support genuine EU public goods. We are going to continue to focus on implementing the roadmap we agreed to make the capital markets union a reality.
We agreed on the need to sum up these discussions when we return in September. We will aim to reach a common view on how we move this important discussion on competitiveness forward at the level of finance ministers.
Today that we also welcomed two new members to the Eurogroup: Eelco Heinen, the new Dutch finance minister, and my own colleague from Dublin, Jack Chambers.
| Read more |