11 September 2020

Remarks by Paschal Donohoe following the Eurogroup meeting of 11 September 2020

A common theme in our deliberations.. is how Europe has pulled together to combat this great crisis and found unprecedented European solutions to address unprecedented challenges... I sense renewed common purpose and goodwill from all.

After witnessing the excellent atmosphere around our table this morning, there's no longer any doubt in my mind on this. Now, indeed, is the time to capitalise on our recent momentum and look at how we can make further progress.

Turning to the meeting today, let me address some agenda points.

First, the regular Eurogroup. Today, we assessed our economic situation and our budgetary response. The positive news is that after the euro area bottomed out in April and May, we saw a significant rebound in activity in June and July. We are all aware of the huge apprehension, the great concern that so many millions of citizens face; and we accept that it will take time, and it will take work to undo the damage caused by this crisis. But we are united in our commitment to do this.

Our society does need growth and it needs the right policies to get businesses on track, to create jobs, to protect income, and to build shared prosperity. If we get this right, the recovery will be strong and it will reach citizens all the way across Europe. We do of course acknowledge that there is a lot of uncertainty about the economic outlook. We all hope to avoid some of the earlier lockdowns, but of course COVID-19 continues to represent a clear challenge to our public health. There are, of course, other sources of uncertainty too, and we are following those very closely.

We also had a thematic discussion on the political economy of reforms, fuelled by insights provided by the Commission on the factors that make or break reforms. The Eurogroup is an important forum for ministers to exchange views and to forge a high-level political consensus on really vital issues. And finding this consensus is all the more relevant as we discussed euro area policies and national reform plans to support the people of Europe and to ensure that this recovery can reach all.

We had a really rich and productive exchange of views where colleagues shared their insights and their national experiences on the role of the Eurogroup. And I want to use the Eurogroup to help forge a greater consensus on priority areas, on reforms, to build our path towards recovery.

I sensed a shared willingness towards a coordinated approach on budgetary policy and for using the Eurogroup as a forum to reach this understanding. Across the euro area some crisis schemes will expire, but others will be extended and improved. Meanwhile, member states are developing new policies to boost the recovery. There will be no sudden stop, no policy cliff edge and overall budgetary policy will continue to support the economy. This consensus gives me confidence that we can build an inclusive and strong recovery. But we do so, acknowledging the scale of a response that has already been delivered. Back in April, the Eurogroup agreed on achieving three safety nets to get us through the crisis –  an EIB guarantee for firms, pandemic crisis support from the ESM, and the SURE instrument to channel money into the schemes that protect jobs. Today, it was important to acknowledge that progress, and important to recognise the scale of what Europe has achieved, but also to acknowledge the work that we need to continue to do to support our recovery.

We also briefly touched upon the selection process for the upcoming vacancy at the Executive Board of the European Central Bank. This week, the President of the European Central Bank sent a letter to the President of the European Council, initiating this process. Today, I informed Eurogroup ministers of where we stand and I launched a call for candidates. We will return to this issue in our Eurogroup in October, where we will aim to select one candidacy. The Council will then send a recommendation to the European Council, which will ultimately appoint the ECB Executive Board member after having consulted the ECB and the Parliament.

So this just takes me to the end of our regular Eurogroup. At that point, we welcomed ministers from outside the euro area to discuss Banking Union. We all acknowledged the importance of a well functioning financial sector under resilient Banking Union at any point, but particularly now with the challenges we face. In June, we agreed to continue to work on strengthening the Banking Union as a matter of priority; and there was a broad agreement about the need to push forward in an overall manner, and we're aiming to make further progress on this during the year.

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