On Monday 15 February, the nineteen Finance Ministers of the euro area will take stock of the macroeconomic situation marked by the continuing disruption caused by the Covid-19 pandemic.
On the basis of the winter economic forecasts to be presented by the European Commission on Thursday 11 February, ministers will try to assess the extent of the rebound expected this year in the light of recent circumstances deemed more favourable, such as the roll-out of vaccines and the EU/UK trade agreement.
“There is reason to be optimistic (...) It is reasonable to expect the recovery to return in the second half of 2021”, a European source said on Wednesday 10 February. Nevertheless, it is still “too early” to start a discussion on the gradual lifting of budgetary support to the economy, she added, while recalling the importance of putting Member States’ public finances on a more sustainable path in the medium term.
The freeze of the Stability and Growth Pact has been renewed for 2021. Discussions on budgetary positioning in the EU are not expected before the end of the first half of the year.
According to an estimate by the EU Statistical Office (Eurostat), the annual growth rate in 2020 has decreased by 6.8% in the euro area and by 6.4% in the EU (see EUROPE 12649/27).
In addition, the ministers will discuss the solvency of economic operators who have received public aid to face the pandemic. While the time has not come for the gradual lifting of public aid, it is also necessary that this aid does not artificially keep insolvent companies alive, this source estimated.
One of the questions raised concerns the criteria to be used to distinguish between solvent and non-solvent companies.
International role of euro. The Eurogroup will also discuss the strengthening of the role of the single currency on the international scene, based on the recent specific Commission communication (see EUROPE 12639/5).
“It is increasingly clear that having a currency that is used globally has more advantages than the resulting costs”, the European source said, noting that the strengthening of the single currency’s international role has so far been more market-driven than a deliberate move on the part of public authorities.
Finally, Lithuania will present its draft budget for 2021 to the Eurogroup. (Original version in French by Mathieu Bion)