Luxembourg, 7 October 2024
Ministers discussed the state of play of the digital euro project and euro area competitiveness, building on previous discussions, and reviewed progress on the capital markets union. The Eurogroup also reviewed economic and exchange rate developments ahead of the World Bank and IMF annual meetings. The Eurogroup President outlined the key points in his letter to the Euro Summit President ahead of the October Euro Summit.
In inclusive format:
Digital euro: state of play in a changing payments ecosystem
Ministers exchanged views on the key political factors shaping the digital euro within the broader context of European payment systems, following presentations by the European Central Bank (ECB) and updates from the European Commission and the Council Presidency.
Any decision to introduce a digital euro would need to ensure that the euro remains fit in a digital and payments world that is quickly changing.
Paschal Donohoe, President of the Eurogroup
Towards a digital euro (background information)
Euro area competitiveness: discussion aimed towards finalising the workstream
Ministers held a discussion aimed at moving towards the finalisation of the year-long workstream on competitiveness of the European economy.
The Eurogroup President set out the emerging key messages for a draft statement and engaged in an exchange of views with ministers on this basis.
Our objective within the Eurogroup is to provide a strategic, cross-cutting vision on some commonly shared policy priorities among finance ministers, which can in turn generate new momentum for both national and European-level efforts.
Paschal Donohoe, President of the Eurogroup
Capital markets union: stocktake
Ministers discussed the follow-up to the Eurogroup statement on the future of the capital markets union from March 2024, with a focus on measures to facilitate access to capital markets for small and medium-sized companies.
The European Investment Bank (EIB) President Nadia Calviño briefed ministers on EIB initiatives in this context.
Maintaining the political momentum on the capital markets union is an important priority for the Eurogroup. In November we will come back to this and assess the different steps that have been taken at national level since we began this project just under a year ago.
Paschal Donohoe, President of the Eurogroup
European capital markets (background information)
What the EU is doing to deepen its capital markets (background information)
Preparation of the October Euro Summit
The Eurogroup President outlined the key points in his letter to the Euro Summit President, reporting on the Eurogroup’s work since March 2024 and outlining plans for the months ahead.
Euro Summit (background information)
In regular format:
Preparation of international meetings, including exchange rate developments
The Eurogroup reviewed recent economic and exchange rate developments ahead of the World Bank and International Monetary Fund annual meetings, building on analysis from the Commission and views from the ECB.
Miscellaneous
Policy priorities of the French government
The new French minister of the economy, finance and industrial and digital sovereignty, Antoine Armand, presented the policy priorities of the new French government.
Preparatory documents
- Draft agenda, Eurogroup
- Draft agenda, Eurogroup in inclusive format
- Draft annotated agenda, Eurogroup
- Draft annotated agenda, Eurogroup in inclusive format
Outcome documents
Press releases
Source – Eurogroup
Any decision to introduce a digital euro would not only be a response to these emerging trends. It would need to be a positive step to ensure that the euro remains fit in a quickly changing digital and payments world. Since we discussed this last, the European Central Bank has continued to work on the technical preparations. Discussions between co-legislators are also advancing on the proposed legal framework.
In our exchange with ministers today, we acknowledged again that public outreach on the digital euro remains key for the success of its potential future rollout. Ultimately, it’s the citizens themselves who will make a decision on whether to use a digital euro, so their views and their trust are essential ingredients of this project. The Eurogroup will continue to politically engage in it to ensure that we remain a strategic anchor to this common European project.
We then turned to the topic of competitiveness. Some of you may recall that around a year ago we initiated discussions and have been addressing the issue of competitiveness now from many different angles in recent meetings. We are now moving towards a conclusion. Today I reviewed with ministers the different topics that we’ve discussed. We looked at individual policy areas, at discussions that cut across individual policy areas and at what could be the key elements of a draft Eurogroup statement. I received feedback from nearly every minister who was present here today.
Our deputies are going to continue to work on this topic and I aim to come back to it in November with the hope of reaching agreement on a text that reflects our shared vision, ensuring that the voice of finance ministers is also present in the different decisions that will be taken on how we enhance the competitiveness of our Union in the years ahead.
We then followed up with a key pillar of this competitiveness work, the follow-up to the statement on the future of the Capital Markets Union (CMU). This is in line with the roadmap on CMU that we endorsed in May. Our discussion looked at how our capital markets can be developed to support mid-sized companies across all EU countries and the role of the European Investment Bank (EIB) in delivering this.
I was pleased to welcome back our colleague Nadia Calviño to our session. She talked about the different initiatives that the EIB is considering in order to provide targeted support to innovative EU businesses to allow them to grow within Europe. Maintaining political momentum on the CMU project is a really important priority for the Eurogroup. In November we are going to come back to this and assess the different steps that have been taken at national level since we began this project just under a year ago.
We have the Euro summit coming up on 18 October and I informed my colleagues of the letter that I plan to send to President Michel and of what will be the different strands of the presentation that I’ll make to the heads of government in a couple of weeks’ time.
We also discussed our preparation for the international meetings in Washington in a few weeks – the IMF and World Bank Annual meetings and a meeting of the G7 finance ministers. Our colleague Giancarlo Giorgetti gave us an update on work that is happening at the level of the Italian G7 presidency. We had a quick discussion on main topics and reaffirmed our view in relation to exchange rate developments.
We also welcomed our new colleagues from Estonia and France – Ministers Jürgen Ligi and Antoine Armand. Each of them gave us a presentation on their priorities, and we look forward to working closely with them in the time ahead.”
Remarks of EU Commissioner Gentiloni at the Eurogroup press conference
“Thank you, Paschal. Let me start with a few words on the euro area economy.
Gradual, moderate expansion is continuing. GDP grew by 0.5% in the first half of the year. Labour markets remain historically strong. Inflation has just fallen below the ECB’s target of 2% for the first time in more than three years – it was 1.8% in September – mostly driven by lower energy prices: good news for the purchasing power of households that had been weakening.
At the same time, investment and construction are underperforming. Manufacturing is sluggish. Global trade prospects have weakened. And the geopolitical situation remains very strong.
Today marks the first anniversary of Hamas’ horrific attacks against Israel. The prospects of a further deterioration of the conflict are deeply concerning. Add onto this the ongoing war in Ukraine, which will soon reach the grim milestone of one thousand days of Russian invasion. So the uncertainty surrounding this economic outlook remains exceptionally high. And we saw this already materialising in oil prices.
We will factor in all these elements in our Autumn Forecast, which we will release on 15 November.
We had a large discussion on competitiveness, enriched by the reports of Enrico Letta and Mario Draghi. There is no doubt that competitiveness will be a key word in the coming years for finance ministers and for the Commission.
I think we are converging towards a common understanding of the main challenges we face: on the need to raise productivity and innovation. On the importance of the Single Market. On the imperative of affordable energy prices. On the massive financing needs for our common priorities.
When it comes to tackling these challenges, there are those that point to the need for structural reforms at national level, market-led solutions, lower regulatory burden, emphasising the role of private financing. On the other hand, there are those that argue for a more active industrial policy, common investments, and a stronger EU budget.
I have to say that both these visions have merit and we will actually need both. Not easy to combine both. We need reforms, and we need investments. We need to cut red tape, and we need a more active role for governments in key strategic sectors – and better if we take a European dimension.
On the financing side, private investment should be the priority, supported by a more developed Banking and Capital Markets Union. This is an area where progress has not been fast enough. Today we heard from Nadia Calvino, the EIB President, on how the EIB can support start-ups and mid-size companies throughout the growth cycle and facilitate access to capital markets.
Aside from private financing, there is also a clear need for public financing at EU level, both to support projects of common European interest in areas like innovation, defence and the green and digital transition, but also to avoid the risks of fragmentation among Member States.
I think that today’s discussion brought us closer to the finalisation of a Eurogroup statement that the Commission strongly supports.
Finally, on the digital euro, we’ve heard from the ECB about the latest developments in the payments area, which highlight the importance of for Europe to develop its own strong digital payments system to ensure resilience and autonomy.
As you know, the legislative process on our proposals to establish the digital euro and, in parallel, to clarify the legal tender status of euro cash is still ongoing. So today was also an opportunity to take stock of where we stand.”
Source – EU Commission