The EU finance ministers of the EU member states are set to discuss the issue of the banking union on the morning of Friday 16 April; the discussion will be an open format, and will be followed by a project to introduce a digital euro in an ordinary format over the medium term. Issues relating to insolvency frameworks and transparency in Eurogroup practices will also be addressed.
The inclusive format of the Eurogroup (27 Member States) will therefore focus exclusively on strengthening the banking union. As such, the Chair of the High-Level Working Group on a European Deposit Insurance Scheme (EDIS), Tuomas Saarenheimo, will provide an update on the technical progress that has been made, since the mandate of the Euro Summit last December, on the development of a work plan to complete the banking union (see EUROPE 12621/3).
Ministers will therefore start a new political discussion on this long-standing dossier, with a view to reaching an agreement at the June Eurogroup.
The main topics likely to be under discussion are the establishment of the European deposit insurance scheme, a review of the crisis management framework, and the cross-border integration of European banking groups. The weighting of sovereign risks on balance sheets will also be discussed.
According to several sources, there is still a long way to go before a consensus can be found between the different national bastions. Opposition to this issue remains the same: the southern Member States are in favour of implementing this insurance system so that the risks can be shared, while the northern Member States (such as Germany, Finland and the Netherlands) want to first reduce the risks before sharing them.
The other major item on the agenda for Finance Ministers – this time in ordinary format (19 Member States) – is the European Central Bank’s (ECB) plan to introduce a digital euro within five years (see EUROPE 12423/20) to counteract a number of international digital currency initiatives, notably the Chinese one.
In this respect, the ECB will report on the referral that was launched in October and closed in January (see EUROPE 12581/21). The aim is to gather comments from the ministers of the various Member States in order to feed them into their work and help decide on the launch of the project by mid-2021. According to diplomatic sources, the project is welcomed by the Member States.
However, the project remains both technically and politically delicate since it raises major challenges, in particular in terms of cybersecurity, the fight against money laundering and tax evasion.
Other important items to be discussed by the ministers include a thematic debate on insolvency frameworks on the basis of a note prepared by the Presidency. This will include a non-legislative approach intended to speed up convergence. The role that the ‘Recovery and Resilience Facility’ can play in this context should also be discussed.
In addition, the ministers will take stock of the progress that has been made in relation to transparency in Eurogroup practices since the initiative was launched in 2016. The President of the Eurogroup, Paschal Donohoe, will report on the various meetings in which he participated that were held by the World Bank Group and the International Monetary Fund. (Pascal Hansens with Marion Fontana, Camille-Cerise Gessant and Aminata Niang)