The Finance Ministers of the Twenty-seven (all but the British) have set different objectives on what the future fiscal capacity for the euro area could finance, on Monday 11 March at the Eurogroup meeting in inclusive format (see EUROPE 12211/14).
This discussion is part of the mandate given by the euro area Summit which, at the end of 2018, asked the Eurogroup to prepare, by June, a detailed proposal for fiscal capacity to support convergence and competitiveness within the euro area (see EUROPE 12160/1).
Mário Centeno, the president of the Eurogroup, chose to separate the various issues relating to this instrument into separate discussions, which is why, after a general debate in February (see EUROPE 12192/18), the ministers discussed the 'expenditure' aspect of the future instrument on Monday.
The Franco-German contribution presented on 22 February was one of the bases for discussion during this exchange (see EUROPE 12200/8).
Not surprisingly (see EUROPE 12210/15), the debates did not produce consensual results.
However, two types of expenses could be supported, Mr Centeno said. "There is broad agreement that this tool should support both structural reforms and public investment, in line with priorities and challenges identified in the European Semester", he told the press.
Several options were raised by the various participants at the meeting. On the nature of the expenditure, some States, particularly in Northern Europe, would prefer aid to be in the form of loans. On the other hand, most Member States, such as Germany, France or southern European countries, are in favour of granting subsidies.
Several delegations would like Member States to co-finance, to a certain extent, the investments and reforms that will be supported. For others, these co-financing rates could be lowered if countries are subject to economic shocks.
Such differences were expected. Indeed, several countries, particularly in northern Europe, have been quite cautious since the beginning of the discussions on the outlines and content of this budgetary capacity for the euro area, while other countries are very much in favour.
At a press conference, Pierre Moscovici, Commissioner for Economic and Financial Affairs, recalled that he considered a stabilisation function essential under this future instrument, as initially proposed by the Commission (see EUROPE 12031/7).
This tool "also needs to play a stabilisation role even if some do not like the word, precisely in order to ensure convergence", he said.
The idea of stabilisation has been taken up in the Franco-German contribution, but a number of states, led by the Netherlands, are opposed to it. And the December mandate does not provide for it.
"More technical work is needed to agree all these details. We will come back to this issue in our future discussions", added Mr Centeno.
The objective is to agree on all aspects in June. "We want to reach a consensus by June", said Bruno Le Maire, the French Finance Minister, on Tuesday 12 March.
The next Eurogroup meeting, to be held in April in Bucharest, will provide an opportunity for ministers to work on the governance aspect of future fiscal capacity. Before another discussion on how to finance this instrument takes place in May. (Original version in French by Lucas Tripoteau)