In an “inclusive format” including all twenty-seven Member States, the Euro Summit on Friday 27 October will take stock of the current macroeconomic situation, marked by a slowdown in growth and persistently high inflation, and of the progress made in implementing the capital markets union and the digital euro, in the presence of the presidents of the ECB, Christine Lagarde, and the Eurogroup, Paschal Donohoe.
The meeting, which will culminate in a specific declaration, will be an opportunity for European leaders to discuss issues such as inflation, which remains a key issue for European citizens, and the EU’s competitiveness vis-à-vis international partners and competitors such as the United States and China (see other news).
The reform of the European economic governance framework currently being negotiated by the EU Council (see EUROPE 13273/13) and the European Parliament (see EUROPE 13272/11) may also be discussed. According to draft European Council conclusions dated 24 October, the EU27 will invite the Council to move forward “with a view to concluding legislative work in 2023”. In his letter to European leaders, Mr Donohoe stresses the importance of pursuing the strategy of consolidating public finances in a gradual but determined manner.
CMU. In March, the Euro Summit mandated the enlarged Eurogroup to identify, by March 2024, the obstacles to capital markets union (CMU) and suggest initiatives to remove them. Carried out in parallel with ongoing legislative initiatives aimed at deepening the single market in financial services (ESAP, Listing Act, retail investment, etc.), this exercise, which focuses on medium-term actions, is broken down into three phases: drawing up a diagnosis, exchanging views with stakeholders and negotiating responses.
According to our information, European finance ministers have relatively little appetite for new legislation. Discussions to date have highlighted a number of issues, such as facilitating cross-border investment, financial education for retail investors and revitalising securitisation. The aim is not to find a replacement for the City of London in the EU, but rather to improve links between national capital markets that have built up their own specific characteristics.
“There is a clear imperative for realising a true single market for capital within the EU. No single Member State’s national market would have the scale to compete globally, and there are benefits for small markets to tap into the integrated one. However, the variance and heterogeneity of the level of capital markets’ development in Member States point to the need to also enhance market depth within Member States”, notes Mr Donohoe.
To see the letter from the President of the Eurogroup, go to https://aeur.eu/f/999
See the European Council's draft conclusions of October 24: https://aeur.eu/f/99d (Original version in French by Mathieu Bion)