The president of the European Council, Charles Michel, has decided not to convene the Euro Summit on Friday 25 March, preferring to focus EU leaders’ work on the EU’s response to the Russian invasion of Ukraine (see other news).
In his letter to the euro area leaders, Eurogroup President Donohoe notes that, after the Omicron wave of the Covid-19 pandemic, the European economy is underpinned by strong fundamentals to ensure continued growth. However, downside risks from inflationary pressures fuelled by soaring energy prices and insufficient supply relative to demand prevail.
Mr Donohoe highlighted the coordinated action of Member States to support sectors that have suffered as a result of the pandemic as well as their ability to pursue agile and flexible fiscal policies to adapt to the new macroeconomic environment (see EUROPE 12915/19).
At the beginning of March, the ECB revised its growth forecasts for the euro area downwards to 3.7% for 2022, 2.8% for 2023 and 1.6% for 2024. However, it announced the further normalisation of the very accommodating monetary policy pursued during the pandemic (see EUROPE 12908/23).
In May, the European Commission will provide a new analysis to confirm or deny the deactivation of the Stability and Growth Pact’s opt-out clause from 2023.
Mr Donohoe hopes to reach agreement in the Eurogroup on a work programme for the completion of the banking union by the June EU summit (see EUROPE 12911/18).
See the President of the Eurogroup’s letter: https://aeur.eu/f/VA
European Semester. It should be noted that, as part of the budgetary process of the ‘European Semester’, the EU27 will endorse the recommendation calling for a broadly neutral fiscal stance for the euro area in 2023 (see EUROPE 12867/9). (Original version in French by Mathieu Bion)