Eurozone Finance Ministers will discuss the recommendation on the economic policy of the euro zone at the Eurogroup meeting on Monday 21 January, before discussing, in an inclusive format, the strengthening of the Economic and Monetary Union (EMU).
Economic policy of the euro area. The recommendation on the economic policy of the euro area is part of the 2019 European Semester budget process and echoes the European Commission's recommendation to this effect, published on 21 November last (see EUROPE 12142).
The Finance Ministers of the Nineteen will have to forward their analysis to the EU Council for its position on a text before the European Council approves it in March.
The Council's draft text, dated 11 January, provides some guidance in this regard. Ministers should invite States to "improve the quality and composition of public finances" and "rebuild fiscal buffers, especially in euro area countries with high levels of public debt" by 2019 and 2020.
This language is indirectly addressed to several countries facing excessive public debt, such as Italy, Greece, Belgium and even France.
International role of the euro. Ministers will also discuss the European Commission's communication of 5 December on strengthening the international role of the euro, in particular as a currency used in international transactions (see EUROPE 12153).
Twenty years after its creation, the aim is to make the single currency even more attractive, even though it is the second most used currency in the world (see EUROPE 12165).
Strengthening of EMU. In a broadened format, the Finance Ministers of the Twenty-seven (all but the UK Minister) will continue their work on deepening EMU, in line with the mandate given by the Eurozone Summit in mid-December (see EUROPE 12160).
At this meeting, the Eurogroup was given a mandate to develop a proposal for a fiscal capacity for the euro area, limited to instruments to support convergence and competitiveness, for decisions to be taken under the EU budget for the period 2021-2027.
Two groups are in opposition on this issue. The first, meeting around France, wants to include in this budgetary capacity a stabilisation instrument, which corresponds, to a certain extent, to the spirit of the Commission's proposal (see EUROPE 12031). The second, composed of several northern European countries (known as the Hanseatic League) with the Netherlands in the lead, rejects this idea of a stabilisation function. Today, the "stabilisation" aspect is not, or is no longer, relevant.
Ministers are also expected to discuss the European Deposit Insurance Scheme (EDIS), the idea being to set up an expert working group to revive discussions that are almost at a standstill today.
ECB. On Monday, the Eurogroup will launch the procedure for selecting a member of the European Central Bank's Executive Board to replace the Belgian Peter Praet, currently Chief Economist.
The name of the Governor of the Bank of Ireland, Philip Lane, unfortunate candidate for Vice-President of the ECB, is circulating. Ireland has never been present on the board of the European institution (see EUROPE 11981).
The Eurogroup will appoint its candidate in February, with a view to a formal decision by the March European Council after a public hearing in the European Parliament.
Italy. The Italian budgetary situation is not on the agenda of this Eurogroup meeting. As a reminder, after several weeks of uncertainty and negotiations, Rome and the Commission reached an agreement on the Italian budgetary path for 2019 on 18 December last (see EUROPE 12163).
However, according to a European source, it cannot be ruled out that some ministers may raise the issue on Monday.
Greece. It should be noted that representatives of Athens' institutional creditors will be back in Athens as part of the 2nd post-programme monitoring mission. This issue will be back on the Eurogroup table in February. (Original version in French by Lucas Tripoteau with Mathieu Bion)