At the Eurozone summit in extended format to be held on Thursday 18 October, the heads of state or government of 27 member states (all except the United Kingdom) will hold an exchange of views on progress in the discussions on Economic and Monetary Union (EMU), but no decisions will be made before the forthcoming December summit.
This meeting has been requested by France, but does not aim to take position on major matters. It comes as part of the mandate given to the Eurogroup in June to present the December Eurozone summit with a roadmap on the deepening of EMU (see EUROPE 12052).
The Eurozone finance ministers have arranged their work around four sequences: - the creation of the common backstop of the Single Resolution Fund (SRF), a role to be taken by the European Stability Mechanism (ESM); - the reform of the ESM; - the creation of a European deposit insurance system (EDIS) (see EUROPE 12118); - the creation of a fiscal capacity for the Eurozone.
The first two sequences were discussed at the Eurogroup meetings of 7 September and 1 October (see EUROPE 12091, 12108). However, like the other two subjects to be discussed on 5 and 19 November, no decision was made, with the end results of the work to be presented at the December Eurogroup meeting.
The aim of this meeting will therefore be to take stock of the discussions. Mario Centeno, the President of the Eurogroup, will present the work in progress.
No written documents have been submitted to the European leaders and none are expected to emerge from meeting of the Twenty-Seven. However, this meeting will allow for a reiteration of the major issue that deepening the EMU continues to be.
Italy. The question of the Italian budget is not the agenda, although some leaders may raise the matter.
It is certainly a cause for concern. On the one hand, the government of Giuseppe Conte forecasts that the nominal budget will stand at 2.4% of GDP next year, while the previous government, led by Paolo Gentiloni, anticipated a level of 0.8% of GDP.
And on the other, the draft 2019 budget anticipates that the structural deficit will increase by 0.8% by next year, although Rome is supposed to reduce it by 0.6% under the rules of the preventive arm of the Stability and Growth Pact (see EUROPE 12118).
I am bringing the message that "it is a budget we have studied very closely". "It is a budget to reverse the trend. We want growth", Italy's Prime Minister Giuseppe Conte said when he arrived in Brussels. In his view, "there is no room for manoeuvre". (Original version in French by Lucas Tripoteau)