Euro-area finance ministers will take stock of the economic situation and initiatives designed to strengthen the European banking sector in Stockholm on Friday, 28 April.
Contrary to fears expressed last autumn, the hypothesis that there would be a short recession in the euro area at the beginning of 2023 has now been dismissed, since euro-area economies have withstood the energy crisis exacerbated by Russia’s aggression in Ukraine better than expected. Inflation, which is still too high, peaked at the end of 2022 and is progressively falling (6.9% in March)—experts expecting that price rises will be brought under control in the second half of this year.
The problem of inflation fuelled not by increases in pay but by the increase in margins granted by the companies themselves could be brought before the Eurogroup.
CMDI. In the presence of the chair of the [ECB] Supervisory Board (SB) and the chair of the Single Resolution Board (SRB), the Eurogroup will discuss the resilience of the banking sector, including the recent proposal aiming to strengthen the European bank crisis management framework (CMDI) by expanding the scope of the resolution (see EUROPE 13164/7 and 13163/2).
A European source indicated on Wednesday, 26 April, that this will be the first opportunity the ministers have to discuss the proposal and “recent bank failures” seen in the United States and Switzerland. This individual believes, “The European banking sector is resilient”. According to this source, one of the lessons to be learned from the SVB and Credit Suisse bank failures is that in the age of digital banking services, deposit flight is “more violent and less predictable”.
CMU. The Euro Summit’s request with regard to deepening the capital markets union (CMU) so as to mobilise private savings and redirect them towards investments in the climate and digital transitions will also be brought before the Eurogroup (see EUROPE 13149/1).
The same source indicated that the aim of this discussion is to “maintain political momentum” by starting to plan short- and medium-term measures.
See the draft annotated agenda: https://aeur.eu/f/6kx (Original version in French by Mathieu Bion)