Luxembourg, 16 October 2023
This was a long and fruitful Eurogroup meeting, here in Luxembourg.
A key ingredient to tackle the economic challenges we are faced with here in Europe is better integrated capital markets.
After our transatlantic dialogue with Secretary Yellen and following the approach we agreed back in May, together with our non-euro area colleagues, we exchanged views on the drivers for progress and possible solutions to make our capital and financial markets more efficient.
We welcomed two market participants and listened to their concrete experience to access funding and to invest in European capital markets. First, Zoé Fabian drew from her experience as Managing Director in Eurazeo Growth to provide the perspective of institutional investors searching for attractive investment opportunities across the EU. Then, Sebastian Siemiatkowski, co-founder and CEO of Klarna presented the point of view of high-growth companies looking for funding to scale up.
Today’s engaging discussion evidenced the value of collecting first-hand experience from market participants, as it raised a number of possible solutions to improve our capital markets. These include activating more growth stage financing for EU scale-ups and developing a strong European exit market.
It is also a reminder of our end goal: more private funding for EU companies to innovate, be competitive, and have the capacity to invest in the twin transition.
In our November meeting, we will continue collecting insights from market participants, with a focus on institutional investors and retail participation.
As the final item of our agenda in inclusive format, we touched upon the upcoming Euro Summit that is scheduled at the end of October. I outlined the main elements I expect to report on to Leaders, on our recent work and our upcoming priorities. In particular, I will highlight the work on macro-economic developments, fiscal policy, the digital euro, the international role of the euro as well as the banking union and the capital markets union.
We then moved into our regular format, where we started with a stock take on the degree of implementation of the euro area recommendations for 2023.
We acknowledged that last year’s recommendations influenced policy actions over 2023 and that Member States are implementing reforms and investments under the RRF that are key for achieving long-term euro area policy objectives.
With regard to the implementation of recommendations, we broadly concurred that we have seen significant progress particularly in fiscal policy, public investments and financial stability.
However, concerns remain about labour costs, skill mismatches, and on the remaining untargeted support for companies and the related risks for fiscal sustainability.
On the challenges for policy actions in 2024, we all agreed that in the immediate future, the primary challenge lies in dealing with inflation and its impacts on fiscal policy, financial stability, wages, and more generally the labour market.
However, as we look further into the future, we must also start thinking about addressing longer-term challenges, notably with regard to the competitiveness of our economies. This is also where the contribution of the RRF becomes particularly significant but obviously, there are many other factors that are crucial for our competitiveness that we need to review. Competitiveness is holding a prominent position on everyone’s agenda.
Starting at the next Eurogroup meeting in November, we have planned a series of discussions in which the Eurogroup is poised to make its contribution on how to better address euro area competitiveness challenges.
We also discussed the digital future of our currency – the digital euro. The Governing Council is expected to soon decide whether to move to the next phase and the ECB President reported on the progress that they are making in preparing for this next step. While legislative deliberations continue in the Council, the Eurogroup will continue to lead the political engagement with the European institutions in the spirit of transparency and democratic legitimacy. To be absolutely clear: a decision whether to issue the digital euro will be taken later – it will be the result of a comprehensive and transparent debate.
Finally, we also took a moment to reflect on the international meetings, right after Marrakesh. Now is the time to keep our current, relevant, course of action steady and we will also continue to closely monitor macroeconomic developments on the global stage.
Remarks by Paschal Donohoe following the meeting of Eurogroup ministers in inclusive format with the US Treasury Secretary, 16 October 2023
With the recent horrific attack on Israel still on our minds, the 27 members of the Eurogroup in inclusive format met with the United States Secretary of the Treasury Janet Yellen.
This comes on foot of the annual meetings of the International Monetary Fund and the World Bank in Marrakesh, and this is now the Secretary’s third time participating in a Eurogroup meeting, which is deeply valued by all of us.
Dear Secretary Janet, let me welcome you again, and thank you again for making the effort to join us here in Luxembourg. Our meeting today in these challenging and difficult circumstances is a clear testimony to the importance that we attach to our dialogue and to the close transatlantic cooperation which is now taking place on so many different fronts. A close EU-US relationship is more important than ever in the economic sphere, but also on security matters and to uphold our shared commitment to freedom, to democracy and to the respect of human rights. We will stand united against those who threaten the multilateral rules based order and the fundamental principles of international law.
Our discussion today focussed on the economic outlook and the challenges for the United States and for Europe in a global environment that is changing quickly. Against this background and looking at the different interlinked economic challenges that we confront, we are determined and we are confident that we will steer our way through this storm together.
The global economy has slowed a bit in the second quarter of 2023, but it is still resilient, and we shared the strong view together that our economies, the European economy, the American economy have fared better than anticipated in the first half of this year. Up until now, on both sides of the Atlantic, we can see the shocks feeding through gradually, with the current dip in growth in Europe and of course, other developments that take place across the world. However, we remain confident that the situation will improve in 2024, and within Europe, we know that we have to continue to work together to find new ways of coordinating our efforts so that we can achieve more collectively than we can individually. And we will do this.
A key theme of our discussion today was, of course, our assistance to Ukraine, where we agreed that we will continue to coordinate our efforts closely. We stand united together in our support of Ukraine in the face of Russia’s unprovoked and unjustified aggression and their illegal annexation of Ukrainian territories.
So today we have reiterated our determination, our shared commitment to continue to work with our friends, with our partners in the United States of America to together tackle the interrelated short and long term challenges, but also to make the most of the opportunities which we are pursuing together. This means we need to increase our efforts so that our economic and financial policies are even more coordinated and impactful. I wish to thank Secretary Yellen for her leadership in making this happen. With her presence today and the exchange of views that we have had, we make that reality a bit closer.