Euro area leaders will take stock of the macroeconomic situation on Thursday, 16 December, with a strong recovery due to the national Covid-19 vaccination campaigns.
The nineteen euro area countries will call for close coordination of fiscal policies to anchor growth permanently, noting the Eurogroup statement in favour of maintaining a moderately expansionary fiscal stance for 2022 (see EUROPE 12847/5).
The issue of inflation, and especially the impact on the recovering economy of a higher than expected price increase next year, will also be discussed.
It is a good time for the economy, but “darker clouds” such as the Omicron variant of the Covid-19 virus and inflation are on the horizon, a European source said on Wednesday 15 December.
Having consistently communicated that inflation is set to fade gradually over the course of 2022, ECB President Christine Lagarde will brief policymakers on the outcome of the crucial Governing Council meeting that afternoon. This should serve to clarify the fate of the ‘PEPP’ operation of massive repurchase of mainly public securities, launched in the spring of 2020 at the outbreak of the pandemic and supposed to end next March.
However, on financial and budgetary issues, “the big discussion will take place in 6 months’ time”, a senior diplomat said on Wednesday 15 December.
Banking Union. According to a draft statement from the Euro Summit, leaders will reiterate their “full political commitment” to completing the banking union in the euro area and setting the Eurogroup the challenge once again to reach agreement on a comprehensive work programme with a timetable.
The draft text does not mention June 2022 as the target date for achieving this, contrary to the objective set by Eurogroup President Paschal Donohoe (see EUROPE 12852/21).
The words of the new German Chancellor and former Finance Minister, Olaf Scholz, will be listened to carefully on this issue, as the German coalition government is keen to move forward on banking union through the creation of a European Deposit Insurance Scheme (EDIS) (see EUROPE 12850/20).
See the draft statement of the Euro summit: https://bit.ly/3oXBjHf
Extraordinary Summit in March. French President Emmanuel Macron will brief his counterparts on the extraordinary European summit that France will host on 10 and 11 March 2022, dedicated to the search for a new European growth model (see EUROPE 12850/17).
Issues related to investment, industry and the creation of quality jobs can be discussed in this context. (Original version in French by Mathieu Bion, with Lionel Changeur)