The EU Finance Ministers made it clear on Friday 16 April in the Eurogroup (inclusive format with 27 members) that they were ready to resume negotiations on the Banking Union. They also welcomed, in the normal 19-member format, the exploratory work launched by the European Central Bank (ECB) on the creation of a digital euro.
Eurogroup President Paschal Donohoe, Commissioner for Economy Paolo Gentiloni and the Managing Director of the European Stability Mechanism, Klaus Regling, all signalled an appetite to make progress on the issue despite the many difficulties, provided that talks on the four open points proceed in parallel.
These include, as Paolo Gentiloni noted, negotiations on the crisis management framework, the European deposit insurance scheme, the regulatory treatment of sovereign exposures and cross-border integration.
The front line has not changed much, we are told. Germany, the Netherlands and other northern countries are not willing to move forward until they have guarantees on risk reduction.
“We consider EDIS to be part of the steady-state banking union”, the Finnish minister said on his Twitter account. “Before this decision, we need to restore the credibility of the crisis management framework and address the regulatory treatment of sovereign exposures”.
The southern Member States, notably Italy, want to move forward on risk sharing first.
The finance ministers let it be known that they will therefore continue their efforts to find a consensus and draw up a work plan on the banking union to be presented to the heads of state and government at the next euro summit in June 2021.
Digital Euro
The other highly anticipated topic of the day (see EUROPE 12699/15) was the report on the consultation and follow-up to ECB President Christine Lagarde’s long-running plan to create a digital euro. Unsurprisingly, eurozone finance ministers welcomed the ECB’s public consultation and expressed their wish to be kept regularly informed of the ECB’s work, together with the Commission.
Germany, through its Finance Minister Olaf Scholz, has been particularly enthusiastic about the creation of this digital currency. This solution would allow Europe to gain greater sovereignty in “ innovative and competitive payments”, he said ahead of the meeting. He believes that Europe should be at the forefront of the digital currency issue.
However, as Mr Donohoe pointed out, this is an extremely “complex” project, which will take time to implement. “The idea is not to be the first to implement a digital currency, but to do it well”, said a source.
And there is no shortage of things to think about, as Commissioner Gentiloni detailed. According to him the following will need to be understood - how: - the digital euro could bring additional gains in payment efficiency; - it could improve financial inclusion; - the digital euro should be distributed; - it could support the digitalisation of the economy more generally and the construction of a digital single market; - to ensure compliance with the highest standards of data protection and anti-money laundering. The ECB will announce by mid-2021 whether or not it intends to initiate the introduction of such a currency.
In addition, the eurozone finance ministers discussed insolvency frameworks. The discussions showed real support for additional non-legislative measures, Mr Donohoe said.
On the other hand, there was no intervention by the ministers on the point of progress in the area of transparency related to the Eurogroup’s practices, we are told. (Original version in French by Pascal Hansens)