At a meeting of the Eurogroup in an inclusive format held in Bucharest on Friday 5 April, the EU Finance Ministers (all but the UK Minister) expressed differences regarding the governance of the future fiscal capacity for the euro area.
“Governance is critical. [...] It is a political issue that also includes a technical and a legal dimension”, said Mário Centeno, President of the Eurogroup, at the end of the meeting.
This discussion was in line with the mandate given at the end of 2018 by the Heads of State or Government, who had asked the Eurogroup to prepare, by June, a detailed proposal for fiscal capacity to support convergence and competitiveness in the euro area (see EUROPE 12160/1).
An exchange had already taken place on the expenditure side of this future instrument at the March Eurogroup (see EUROPE 12212/10) and it was therefore governance that was on the agenda this time. There are differences of interpretation on this issue, in particular as regards the incorporation of this fiscal capacity into the European Union's legal framework or the decision-making procedure.
Euro area Member States are in favour of decisions in this context being taken by countries that have adopted the single currency, unlike countries outside the euro area, which want to have a say and prefer that procedures remain within the EU framework.
“We will also ask for a governance with the 19 Member States for Eurozone budget because we can’t accept a Eurozone budget which will be decided and put into force by the 27 Member States”, said Bruno Le Maire, the French Finance Minister upon his arrival. He added, at a press conference, that a “broad consensus” was emerging among euro area Member States for 19-party governance on the basis of an intergovernmental agreement. According to our information, only the Netherlands and Finland still have political reservations on this point. It should be recalled that Amsterdam has been quite cautious since the beginning of the discussions with regard to this fiscal capacity.
Eugen Orlando Teodorovici, Romania's Finance Minister, said that discussions on the euro zone should include “the other part of Europe which is not yet in the Eurozone, because at the end of the day all of us will be part of this family”.
Discussions also focused on the links between future fiscal capacity and the ‘European Semester’ budgetary process. “We favour a strong link between the strategic guidance to euro area Member States and the European Semester”, said Pierre Moscovici, Commissioner for Economic and Financial Affairs, referring in particular to a recommendation for the strengthened euro zone in this regard.
However, the purpose of this meeting was not to take decisions, which should be taken at the end of the semester, as Mr Centeno pointed out. Next month, the major European funders will look at how to finance this future instrument. (Original version in French by Lucas Tripoteau and Marion Fontana)