Meeting in ‘inclusive Eurogroup’ format, the European finance ministers will attempt to finalise a declaration on deepening the Capital Markets Union (CMU) on Monday 11 March, following on from the ministerial discussions that took place in Ghent at the end of February (see EUROPE 13357/8).
“I am fairly optimistic. I think that the Eurogroup will be able to reach a joint declaration, but we are not there yet. Discussions are under way”, said a European source in Brussels on Thursday 7 March. According to her, there is agreement on “90%” of the dossier, with the stumbling blocks remaining concerning securitisation, the supervision of financial players at European level and the way to reduce the regulatory burden.
At a time when the European Union is facing an immense need for investment to undertake the climate and digital transitions, the Eurogroup has been reflecting for a year on how to breathe new life into the CMU project in order to mobilise the private capital available in Europe and, ultimately, strengthen the competitiveness of the European financial marketplace.
In a preparatory version of the declaration, the President of the Eurogroup, Paschal Donohoe, identified three main areas for action: - strengthening the financial architecture to remove barriers to European integration; - facilitating companies’ access to capital markets; - introducing incentives to increase the participation of retail investors (see EUROPE 13355/17).
According to the latest provisional version that will be submitted to the ministers, of which Agence Europe has obtained a copy, the Eurogroup is considering a total of 13 key measures. The draft text is more cautious about transferring supervisory powers over certain financial players or infrastructures to the European level. It now simply asks the European Commission to assess possible prudential options, focusing on the centralised collection and storage of financial data.
Emphasis is also placed on the importance of reducing the regulatory burden inherent in capital markets, particularly for small investors. It should also be noted that the proposal, inspired by France, to develop a common cross-border savings product on a voluntary basis has been maintained.
The draft declaration calls on the Commission to present initiatives as soon as possible, with a view to completing the work, particularly the legislative work, by 2029. The Eurogroup will undertake to provide regular updates on this issue.
Mr Donohoe’s objective remains to finalise the declaration before the Euro Summit in Brussels on 22 March. It will then be up to the Commission to take inspiration from the Eurogroup’s reflections by incorporating certain measures into its work programme on financial services with a view to the next legislative cycle.
To see the Eurogroup’s draft statement: https://aeur.eu/f/b7o
On Thursday, the ECB also adopted a statement substantially revising its vision of a Capital Markets Union.
See the statement: https://aeur.eu/f/b7n
Fiscal policy in 2025. The 20 euro area ministers will review the macroeconomic situation in the euro area on Monday, following the ECB’s decision to leave its main key rates unchanged (see EUROPE 13366/11).
The Eurogroup will also have an exchange of views on the coordination of fiscal policies in 2025, which will be the first year of application of the revised Stability Pact, once the revision has been definitively adopted (see EUROPE 13348/8). It is expected to adopt a specific declaration on Monday.
In June, the European Commission will have to provide policy guidelines on the basis of the revised European fiscal rules, to enable Member States to prepare their multiannual macro-budgetary programmes for the second half of 2024 in the best possible conditions, bearing in mind that around 10 countries are expected to be subject to an excessive deficit procedure in June.
For 2024, the Eurogroup is recommending a restrictive fiscal stance at euro area level.
“Next year, we will have to undertake fiscal consolidation”, said this source, describing the implementation of the budgetary surveillance timetable as a “challenge”. (Original version in French by Mathieu Bion and Bernard Denuit)