Meeting in an inclusive format, the finance ministers of the euro area countries will hold their first talks with the British Chancellor of the Exchequer, Rachel Reeves, on Monday 9 December in Brussels (see EUROPE 13518/29).
The aim of this meeting will be to forge new relations with a neighbouring third country, a former member of the European Union, with which the Member States maintain historic relations.
“In these uncertain times, it is a good idea to invest in good relations with a G7 partner country”, as is already the case with the United States, said a European source on Thursday 5 December. They stressed that this meeting would in no way aim to conduct negotiations on any specific issue.
DBPs 2025. In normal format, the ministers will discuss the 2025 draft budget plans that were submitted at European level in mid-October by all euro area countries except Austria, Belgium and Spain (see EUROPE 13532/11).
The Commission is of the view that the draft budget plans of eight countries – Croatia, Cyprus, France, Greece, Italy, Latvia, Slovakia and Slovenia – comply with the recommendations of the July Eurogroup. However, the draft budget plans of seven other countries – Germany, Estonia, Finland, Ireland, Luxembourg, Malta and Portugal – are not entirely in line with these recommendations. In addition, the Netherlands’ fiscal consolidation path is judged not to be in line with the rules of the Stability Pact, while Lithuania’s may not be as well.
The 2025 draft budget plans are intended to give concrete form to the first year of the path for consolidating public finances contained in the multiannual budget programmes (four or seven years) that the Member States must draw up in accordance with the revised Stability and Growth Pact.
According to this source, the Eurogroup will adopt a short “declaration” on Monday, which will not go into detail on the budgetary situation of each euro area country. In January, the Ecofin Council will adopt the budgetary policy recommendations on the 2025 draft budget plans, the multiannual budget programmes and the excessive deficit procedures for eight EU countries.
France. Asked about the political crisis in France, this European diplomat stressed that the Eurogroup was not going to send “any particular message to France”. Everyone is hoping for “clarification” that will enable France to “form a stable government”, but “the democratic process” under way must be “respected”, he added.
France, which is subject to an excessive deficit procedure (-6.1% of GDP expected in 2024), has submitted a seven-year multiannual budget programme. However, the Parliament’s censure of the Barnier government on Wednesday cut short the adoption of France’s draft budget plan for 2025 (see EUROPE 13517/7).
This source now expects the future French government to update the multiannual budget programme and the 2025 draft budget plan.
IMF. The Eurogroup will discuss the IMF’s new ‘Article IV’ report, which takes stock of the macroeconomic situation in the euro area. This source noted “a convergence” of views between the Eurogroup and the international financial organisation on the following points: - despite signs of a slowdown in some countries, growth is expected to rebound in 2025; - the labour market remains robust; - inflation will stabilise next year around the medium-term target of 2%.
The IMF recommends consolidating public finances in euro area countries, reforms to boost productivity and greater integration of European capital markets. (Original version in French by Mathieu Bion)