Brussels, 17 February 2025
Update from Bulgaria on the state of convergence
Temenuzhka Petkova, the Bulgarian minister for finance, joined the meeting to update ministers on progress made by Bulgaria towards fulfilling the criteria to adopt the euro.
Macroeconomic outlook and prospects for the euro area
The Eurogroup took stock of macroeconomic prospects and reviewed recent global developments affecting the euro and the euro area, based on input from the Commission and the European Central Bank.
President Paschal Donohoe also engaged with ministers on upcoming international meetings in South Africa.
Euro area recommendation
Ministers discussed the draft recommendation on the economic policy of the euro area for 2025, with a view to its approval at the Economic and Financial Affairs Council meeting on 18 February 2025.
In the current complex economic environment, the euro area recommendation is as relevant as ever, in particular where it relates to competitiveness, resilience and macroeconomic and financial stability.
Paschal Donohoe President of the Eurogroup
The Eurogroup also explored how to continue to leverage the euro area recommendation to enhance policy direction and ensure its effective implementation.
Eurogroup work programme up to July 2025
The President of the Eurogroup presented the Eurogroup work programme for the first half of the year and ministers approved it.
In a world of economic interdependence and current global developments, the importance of our euro area coordination, forging agreements and delivering on our shared commitments are key elements of this Eurogroup work programme.
Paschal Donohoe President of the Eurogroup
Policy priorities of the Irish and Belgian governments
President Donohoe, as the new minister for finance of Ireland, and Vincent Van Peteghem, the new Belgian deputy prime minister and budget minister, presented the policy priorities of their governments.
Preparatory documents
Brussels, 17 February 2025
We began our February Eurogroup meeting by welcoming the Bulgarian Minister for Finance, Temenuzhka Petkova, who updated us on Bulgaria’s progress towards fulfilling the criteria to adopt the euro.
We appreciate Bulgaria’s ongoing efforts and its commitment to economic stability and convergence with the euro area. We continue to monitor its progress towards the objective of joining the euro area. Once Bulgaria considers it is ready to submit a request for ad hoc convergence reports to the Commission and the ECB, it will be for the institutions to assess whether all the criteria to guarantee a successful integration into the euro area are fulfilled. In the meantime, the Eurogroup is supportive of Bulgaria’s ambition on its path towards the introduction of the euro at the appropriate time.
We then turned to a discussion on economic developments and prospects for the euro area in a rapidly evolving global landscape. We get questions every day about announcements from other countries and what they mean for the euro area. I can understand this interest and the need for answers. The institutions today presented us with their analysis and views and we had a very useful exchange. The discussion today confirmed the clear determination of all members of the euro area to remain united on the issues at hand. We remembered that we’ve already steered through several crises and come out stronger. Parts of our economy are still adjusting to the energy shock, but fundamentally, we have been more resilient than many would have expected.
We outlined today the work that we need to do. We recommitted ourselves to familiar projects. We acknowledged the strength of what is there within the euro area at the moment – the credible policies to bring down inflation, deficits and debt. A diversified economy with a rich structure of firms that have established global value chains, skilled workers, quality infrastructure, a knowledge economy, high savings rates, and a stable and well regulated financial sector. Yes, there are concerns. There is work to do, but we are very clearly a strong link in the world economy.
On the subject of further work to do, our next item was on the recommendation on the economic policy of the euro area for 2025, which sets out three priority areas where euro area member states and the Eurogroup will be taking action. I’m pleased to announce that the Eurogroup agreed to this recommendation, based on the proposal of the Commission. In the current complex economic environment, the euro area recommendation is as relevant as ever, in particular where it relates to competitiveness, resilience and macroeconomic and financial stability. The annual euro area recommendation holds significant political weight, but past recommendations have not always been used to the full potential. So there was agreement amongst ministers on making enhanced use of the recommendation through more structured, more effective and more consistent follow up, particularly in shaping the future Eurogroup’s competitiveness agenda.
We also adopted our work programme until July, which is about putting into practice the policy priorities that we discussed in January and February. Ultimately, we’re here to deliver results for our economies, for our citizens, and to navigate through choppy waters.
The work programme focussed on five priority policy areas: budget coordination; keeping up the momentum of capital markets union; progressing with the banking union; competitiveness with the objective of building on our work from last year and focussing notably on productivity; and finally a common currency, notably the digital euro project and the international role of the euro, which comes into fresh focus in a fast-evolving geopolitical landscape. This is all reflected in the work programme we just issued, which I encourage you to consider.
We then finished with a presentation of the policy priorities of the new governments of Belgium and of my own country, Ireland, which brought our meeting to a close.
Source: Remarks by Paschal Donohoe following the Eurogroup meeting of 17 February 2025
Remarks by EU Commissioner Dombrovskis at the Eurogroup press conference
Brussels, 17 February 2025
Thank you. Good evening, everyone.
Our main discussion today was about the macroeconomic outlook, including the implications of the very fluid and uncertain global and geopolitical landscape for the euro area economy.
The recent announcements from the new US administration show that their commitment to the transatlantic partnership cannot be taken for granted.
We regret the recent announcement of tariff measures and will be ready to respond in a firm and proportionate way.
The uncertainty relating to our trade policies has substantially increased and is already having a negative impact on the global economy – including on the US.
But also, the EU is affected, as the uncertainty puts a lid on investment and reduces prospects for external boost for the EU economy.
A second factor putting a drag on our economy is that energy prices have again increased in recent months.
However, in spite of all of these challenges, the conditions for a gradual pick-up in growth momentum over the course of this year remain in place.
The labour market is expected to remain resilient, and the disinflationary process remains on track, even if higher energy prices are set to lift headline inflation in actual term.
All in all, we expect the EU economy to grow at a slower pace compared to what we had projected in the autumn forecast. And, again, uncertainty is particularly high.
The euro area must brace itself for an increasingly unpredictable and transactional international environment. We will need to make full use of our strengths and address our weaknesses with utmost urgency.
We will have to take more responsibility for our security and defence; and improve our competitiveness and economic fundamentals.
We must act now to secure our long-term prosperity.
This brings me to the next point, the Euro Area Recommendation, which the ministers endorsed today and that serves as collective policy guidance for euro area Member States.
Crucially, this year’s recommendation highlights the urgent need to address lagging productivity and innovation, stressing the importance of continuing our efforts to enhance euro area competitiveness.
The recommendation places a strong emphasis on the need to strengthen the Single Market and on advancing the work on the Savings and Investment Union.
It is vital that we now turn those recommendations into tangible outcomes, and this will require a common effort from all.
The Commission also supports the work programme for the Eurogroup that Paschal has presented to us today.
The programme sets a clear path for addressing the important challenges we face.
These include: Enhancing Europe’s competitiveness, supporting sound public finances, preparing to respond to global challenges as they emerge, progressing on the digital euro project.
As you can see, we will remain busy over the course of this year.
Finally, as Paschal has already mentioned, we began today’s meeting by hearing from Minister Petkova on Bulgaria’s progress towards joining the euro area.
Bulgaria has made further progress towards meeting the price stability criterion, which was the only criterion that Bulgaria did not meet in the 2024 convergence report.
So, we will continue to follow inflation developments in Bulgaria closely.
We encourage the Bulgarian authorities to maintain sound finances and look forward to receiving their first medium-term fiscal structural plan shortly.
Finally, we were reassured by Minister Petkova that the necessary legal changes related to the independence of Bulgaria’s central bank will be addressed, and that further progress will be made on the commitments that Bulgaria took upon entering ERM II.
We count on Bulgaria to also go this last mile. The Commission will continue to support Bulgaria’s efforts and preparations to adopt the euro.
Thank you.
Source – EU Commission