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However, we do have the resilience to face this new shock with savings that were built up during the pandemic. Healthy balance sheets in the financial sector and the flexibility and agility of our economy can and will see us through this challenge.
There will be an impact on growth in the short term and the high price of energy and other commodities on world markets which does mean that, as a continent, our purchasing power has suffered. Our discussion today showed that many member states are indeed cushioning the blow for their citizens, especially for the most vulnerable households.
The Commission
presented to the Eurogroup the package it issued today and the European
Central Bank outlined how it is responding to higher inflation.
That's why the Commission's announcement on keeping the general escape clause activated for another year is an important development. At the same time, this decision doesn't change our objective of progressively shifting our fiscal stance from supportive this year to neutral next year. There is broad agreement amongst ministers that we need to strive to continue to make our budgetary policies and decisions as sustainable as possible in this uncertain environment. So we will be following up on the discussion today in more depth in the next couple of months. The policy trade-offs are very complex and we will take the time necessary to get the policy balance right. We will aim to adopt a statement on the budgetary stance for next year at our July Eurogroup meeting.
On the subject of fiscal policy, we discussed the updated draft budget plans of Portugal and Germany. We welcomed the Commission opinions on them and we share the Commission's positive assessment. As usual, we have adopted a short Eurogroup statement reflecting our views.
We also today discussed the candidacies for the upcoming vacancy of the Managing Director of the European Stability Mechanism. The purpose of having this discussion within the Eurogroup was to assess the level of support that candidates receive and to play a role in facilitating the actual appointment which will take place at the ESM Board of Governors.
Following a brief presentation by my colleagues from Italy, Luxembourg, the Netherlands and Portugal of their nominees, we then held an indicative vote. The Netherlands have decided to withdraw their candidacy. That means we now have three candidates in this contest: Marco Buti, Pierre Gramegna and João Leão. We will continue further informal consultations with a view to add to reaching an agreement at the ESM Board of Governors meeting on the 16th of June.
Today, we continued our discussion in inclusive format on the draft work plan to complete the Banking Union, building on the special meeting we had earlier this month and much work in in the high level working group. We had a full discussion on my proposal for a stepwise and time bound work plan. The meeting we had this evening fully met my expectations regarding our discussion.
What is on the table is very finely balanced, based on four policy areas, two phases and a political checkpoint. I have to acknowledge that differences of views remain. This is what I would expect at this point in the process.
Nonetheless, reaching agreement would be beneficial. It would send a sense of commitment on an important point and indicate that we've aimed and have been successful in reaching a fair balance for all parties. We will work hard in the time ahead to set the path for the future of this vital and common project.
I will re-engage on this again in June to find an agreement. I continue to reflect on all the arguments that I heard today on Banking Union, and I'll engage with all ministers and do my very best to help reach a balanced compromise.