28 April 2023

Remarks by Paschal Donohoe following the Eurogroup meeting of 28 April 2023

We began our meeting by focusing on recent developments that have taken place in the United States and in Switzerland, and their implications for our economies and for our banking systems. We also reviewed the indicators of economic performance over the last weeks and what that means for our policy decisions in the time ahead.

There are some lessons with regard to what has happened with banking issues that stretch beyond the euro area. This is the reason why we had our non-euro area finance ministers attending today. In addition to the Commission, the ECB and the ESM, we also had the chairs of the Single Supervisory Mechanism and the Single Resolution Board in attendance and also the Chair of the ECON Committee of the European Parliament. We also welcomed the new member of the Eurogroup, the new finance minister from Estonia, Mart Võrklaev, to our meeting. He gave a brief presentation on the priorities of the government of Estonia.

The speed with which recent events in the financial sector have unfolded is a key theme that emerged from our discussion today. When we met a number of weeks ago, the Commission and the ECB had already debriefed us on issues that were taking place within America and some of the consequences of this for our wider financial system. Closer to the euro area, the developments that took place with regard to the merger of Credit Suisse with UBS were also a key area of focus. Acknowledging the speed of these recent developments, all ministers and all those who contributed this morning also acknowledged the fact that our banking system remains resilient and stable.

Strong rules and strong supervision are the first line of defence. The work that has happened over many years with regard to the regulation and the resilience of our banking system proved so valuable over the last number of months. But still, recent events have reminded us of the work that we still need to do. This is why we looked at further steps regarding how we can make our system even more resilient. Two key priorities: looking at how we can continue to deliver against our commitment that the European Stability Mechanism can provide the liquidity backstop to the Single Resolution Fund; and looking at how we can deepen our resilience, reviewing the framework for crisis management and deposit insurance schemes targeting in particular small and medium-sized banks within the European Union.

We will do all of this work because we know we need to continually upgrade our framework for managing banking difficulties. This is why I very much welcome the huge work that the Commission has done since our agreement in June to bring forward the proposal.

I believe that moving forward on those areas, deepening and strengthening our capital markets is vital to not only how we can manage risks, but equally vital regarding how we can deepen our ability to invest in a better future for our citizens. Now is the time to proceed. Now is the time to move on with the really important legislative negotiations that will be starting immediately within the Council. I made the point to all of my colleagues here today that in our statement of last summer we had committed ourselves to completing this work within the current legislative cycle.

Today I also debriefed my colleagues on the last Euro Summit that myself and President Lagarde attended, and emphasised the focus that all our leaders put on how we can deepen our Capital Markets Union. The Eurogroup will return to that work very shortly.

Eurogroup

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