Euro area Finance Ministers will review the macroeconomic situation, in Brussels on Monday 12 July, in the presence of US Treasury Secretary Janet Yellen. They will discuss the fiscal position of the euro area and the ECB’s digital euro project.
The Eurogroup and Ms Yellen will debate the fiscal and economic measures taken to combat the pandemic and boost the economy.
This “inspiring” discussion will “strengthen transatlantic ties“, said an EU source on Thursday 8 July. According to the source, every effort will be made to avoid addressing the international tax reform, which is currently being discussed at the G20 Finance meeting (see EUROPE 12757/17), also because the competent body is the Ecofin Council.
The US is pressuring the Europeans to delay the introduction of their European digital levy until an agreement is reached at the OECD on comprehensive reform. The issue is expected to be on the agenda of the informal meeting of EU Finance Ministers on 10-11 September in Slovenia.
Banking Union. The EU27 Finance Ministers will be briefed by the president of the Eurogroup, Paschal Donohoe, on the results of the Euro Summit, which reconfirmed the will of the 19 euro area countries to complete the Banking Union by finalising “without delay” a comprehensive work programme on financial risk sharing and reduction (see EUROPE 12749/7).
In June, the Eurogroup failed to agree on a work programme, partly due to persistent differences over the content of the measures and the proximity of the German parliamentary elections (see EUROPE 12745/12). It has given itself until the end of 2021 to achieve this.
On Monday, the Eurogroup will focus on the “organisation of work” in the second half of the year, the source said.
Fiscal stance. The European Fiscal Board will present its recent report to the ministers, in which it considers the expansionary fiscal stance at the euro area level for 2022 to be appropriate (see EUROPE 12742/8).
The European Commission will do the same with its summer economic forecasts, which sharply raise expected GDP growth in the euro area as health restrictions imposed to combat the Covid-19 pandemic were lifted more quickly than expected (see EUROPE 12757/15).
Maintaining an expansionary fiscal stance until the end of 2022, while shifting the emergency measures to targeted growth-enhancing ones, remains “consensual” within the Eurogroup, the source said, adding that further emergency measures would be unavoidable if further health restrictions are needed to counter the rapid spread of coronavirus variants.
The review of the Stability and Growth Pact is not on the ministerial agenda on Monday. The Commission is expected to relaunch this reflection in the autumn, in the light of the lessons drawn from the pandemic. On Thursday, the European Parliament voted on a revised European economic governance framework (see EUROPE 12758/4).
Digital Euro. Lastly, the Eurogroup will discuss the ECB’s digital euro project on the basis of presentations by the Frankfurt Institute and the Commission.
This discussion will be very general, including the implications of a digital euro for citizens and businesses and how the Eurogroup will be involved in this project. Germany supports the creation of a specific working group involving the ECB, the Commission and the Eurogroup.
In the European Parliament, the Chair of the ECB’s Supervisory Board, Andrea Enria, stressed the importance that a future digital euro does not compete directly with the European banking sector (see EUROPE 12753/16). The ECB may announce, on Wednesday 14 July, the launch of a pilot project looking into the feasibility of a digital euro. (Original version in French by Mathieu Bion with Marion Fontana)