04 December 2017

Main results of the Eurogroup meeting of 4th December

The Eurogroup met in two formats: the first was a regular meeting of the euro area ministers, while the second part was a meeting of the ministers from 27 EU member states with the aim of preparing the Euro Summit that will be held in December.

Election of the new President of the Eurogroup

The Eurogroup elected Mário Centeno, Portuguese Minister for Finance as next Eurogroup President. He will begin his term as of 13 January 2018. The President of the Eurogroup is elected by its members by simple majority, for a term of 2.5 years, in line with Protocol 14 of the Treaty.

Mário Centeno to become next Eurogroup President (press release)

Draft budgetary plans 

The Eurogroup discussed the 2018 draft budgetary plans of the euro area member states and the overall budgetary situation in the euro area. The Eurogroup issued a statement.

Draft budgetary plans 2018 (European Commission website)

Eurogroup statement on the Draft Budgetary Plans for 2018 (press release)

Post-programme surveillance: Cyprus and Spain

The Eurogroup was informed of the main results of the post-programme surveillance missions to Cyprus and Spain, carried out by the staff of the European Commission and the European Central Bank, in autumn this year.

The post-programme surveillance ends when at least 75% of the loan has been repaid.

Greece's adjustment programme: state of play

The Eurogroup was briefed by the institutions (the European Commission, the European Central Bank, the International Monetary Fund and the European Stability Mechanism) on the progress of the ongoing third review of Greece's macroeconomic adjustment programme. On 2 December, the Greek authorities and the institutions reached a staff-level agreement on policy conditionality. The focus now shifts to the implementation of the required prior actions by the authorities.

Thematic discussions on growth and jobs: tax wedge on labour

Ministers continued their discussion on how to further reduce the tax wedge on labour as a means to enhance economic growth. They evaluated progress towards the benchmark that the Eurogroup agreed in 2015 by looking into the measures foreseen in the 2018 budgetary plans of the euro area member states.

Eurogroup work programme

The Eurogroup adopted its work programme for the first semester of 2018.

Eurogroup work programme for the first half of 2018

Deepening of the Economic and Monetary Union

The ministers continued their preparation of the Euro Summit meeting of 15 December, which will discuss matters related to the deepening of the Economic and Monetary Union (EMU) and the completion of the banking union. [...]

Full press release

Remarks by J. Dijsselbloem following the Eurogroup meeting in inclusive format

[...]First of all, we should start - and there was very broad support in the group on this - from the roadmap for the banking union that was agreed by all in 2016. First of all, to deepen it, to be more precise. The Commission, on our request, has put forward a very good paper, on the work done so far, on the banking union. The issues that are still being worked on and the work that we still need to do. The Eurogroup could pick up on that, in the beginning of next year, to develop the roadmap for the banking union deeper, to be more precise on the specific steps that need to be taken in terms of risk reduction. This would unlock next steps in terms of risk sharing. But also that agenda would have to be broadened: it is not just about the banking union, but also about fiscal issues and the role of the ESM. I would also think that, in June next year, there shouldn't just be a broaden and deepened roadmap but also some decisions, if possible, on first steps. I think the credibility of the whole process would be strengthened if we could achieve that. And the Eurogroup needs to do the work.

So the way to structure the work I think could be to have a discussion to specify the roadmap on the banking union: be very specific on what the next steps are. We would need to have more in-depth discussion on new fiscal instruments. There are many different ideas here - from some who don't see any purpose to different colleagues who have different ideas about the purpose of the fiscal instruments. Also the size of the instrument and how it would have to be designed. All of that really needs in-depth discussion at political level; and I think it should be done in Eurogroup/Ecofin or Eurogroup in an extended format.

Secondly on fiscal, we have an ongoing discussion on the complexity and effectivity of our fiscal framework. My sense is that we in general terms all agree: it should be credible, it should be effective and it should not be so complex. But we have not succeeded to make progress on this and a possible way forward would be to ask a independent experts' working group to come forward with an advice along those criteria.

On the ESM, one of the possible first steps for the banking union could be the issue of creating a backstop to the Single Resolution Fund. As I said last time, there is quite a broad support for the ESM to play that role. But I could imagine that, on a number of topics like the banking package that the Commission has put forward, or all the efforts put in to deal with NPLs, we would have to make some progress in the coming half year - and I think it is possible. It would then possibly open the opportunity for a decision on the backstop to the resolution fund. And here many of us are looking at the ESM. There is also broad agreement that the ESM should have an important role in financing, designing, monitoring programmes, together with the Commission. I could imagine that the Commission and the ESM would come forward with a joint approach, a draft agreement, on how they could do this together in the future - who would do what. I think that would be a very practical way forward to give clarity on that specific role of the ESM.

Finally as I said, on fiscal instruments, more in-depth discussions will be needed. That will also regard the EU budget, if you think of instruments from the EU budget or EU credit lines from the budget that will have to be part, inevitably, of the multi-annual framework debate, which already will be complex, due to Brexit. The same would go for the need of the so-called European public goods, which many of us feel should have a more prominent place in the budgeting at European level. This is another ambition that needs to be put into the whole multi-annual framework. Another approach would be some kind of financing instrument from the ESM. But this will require more discussion. [...]

Full remarks

 

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