Mário Centeno, President of the Eurogroup, said on Tuesday 19 February that the future budgetary capacity of the euro area would be "a key part" of the future of the single currency, during a debate on the 20th anniversary of the introduction of the euro, organised as part of the 2019 Euro Parliament Week in the European Parliament.
This exchange allowed speakers to comment on the future of Economic and Monetary Union (EMU), while work at the Eurogroup on these issues - in particular on building fiscal capacity for the euro area - continues on the basis of a mandate given by the December Euro Summit (see EUROPE 12192, 12160).
Discussions on the future fiscal capacity of the euro area are currently focused on three issues: the origin of the funds for this instrument, what it will finance and governance.
On the second point, Mr Centeno considered that "In my view, it would make sense to collectively support growth-enhancing policy reforms that increase productivity and facilitate swift reallocation of resources – both capital and labour – across the euro area".
Between those in favour of supporting the implementation of structural reforms and those wishing to stimulate public investment, Mr Centeno did not decide, considering that budgetary capacity should serve these two objectives.
While European finance ministers are expected to make a proposal on the architecture of this future budgetary capacity in June, differences of opinion do not make this task easy, said Pierre Moscovici, Commissioner for Economic and Financial Affairs.
"We have reached agreement in principle on the instrument, but we are far from agreeing on the modalities", he said, adding that he would devote "all [his] energy" to ensuring that progress can be demonstrated at the June meeting of the European Council.
With regard to this specific instrument or other reforms, Mr Moscovici recalled that "the strengthening of Economic and Monetary Union must remain our top priority".
Roberto Gualtieri (S&D, Italy), Chairman of the European Parliament's Economic and Monetary Affairs Committee, welcomed the fact that "finally, the subject is at the heart of the Eurogroup's work".
However, he criticised in several respects the approach envisaged by some national delegations to the Eurogroup on this subject and shared the European Parliament's position that the future instrument "must be part of the Union's budget and therefore subject to budgetary procedures".
"We need a convergence function, but also a stabilisation function", added Mr Gualtieri, in a statement in line with the Commission's initial proposal (see EUROPE 12031).
Nevertheless, the work in the Committee on Economic and Monetary Affairs on budgetary capacity is close to failure. According to some experts, this is due to the will of Pervenche Berès (S&D, France), co-rapporteur on this issue, to establish an unemployment insurance function. The EPP Group has not appointed a replacement for the German Reimer Böge, who resigned as co-rapporteur (see EUROPE 12187). (Original version in French by Lucas Tripoteau)