On Monday 15 July, as part of the Eurogroup, the euro area finance ministers held a wide-ranging discussion with Enrico Letta on his proposals for financing and reviving European competitiveness (see EUROPE 13393/3).
Eurogroup President Paschal Donohoe highlighted the many divergences between Eurogroup members, but felt that there were also shared views, notably on making the Capital Markets Union (CMU) a reality and “exploring EU-level common actions to support genuine EU public goods”.
He added that the ministers had agreed to resume these discussions in September, in the hope of reaching agreement on a common position to take the issue of European competitiveness to the European finance ministers.
In the view of the European Commissioner for Economy, Paolo Gentiloni, the private sector must shoulder the burden of investment, as Europe no longer suffers from a shortage of public funding. This is why, he added, the Capital Markets Union is a priority.
Mr Gentiloni also felt that better use should be made of the synergies between the public and private sectors and said “a toolbox at EU level in terms of common instruments and financial firepower” should be developed “to meet our common challenges”.
This was one of the issues that divided the Eurogroup. For example, Christian Lindner, Germany’s Federal Finance Minister, said that implementing the CMU was a priority and that it was more important than considering more public debt or debt pooling.
Pierre Gramegna, Managing Director of the European Stability Mechanism (ESM), also agreed that, first and foremost, optimum use should be made of existing EU-level instruments.
Mr Gramegna added that the ESM took note of Mr Letta’s proposals to create a new instrument within the ESM inspired by the support loans during the pandemic and of the fact that the ESM could help to address the risks to financial stability arising from the geopolitical situation.
However, Pierre Gramegna stressed that, in order to act in this way, the members of the ESM would have to reach a consensus on the fact that defence and security issues were of such a nature as to pose a systemic risk, and required the ESM to be triggered.
Against this backdrop, Mr Gramegna once again stressed the need for the ESM Treaty to be ratified in full. (Original version in French by Émilie Vanderhulst)