Finance ministers of the euro area countries will take stock of the macroeconomic situation on Friday 11 April in Warsaw.
In an inclusive format, the Eurogroup will discuss the latest international developments, particularly the impact on the European economy of the customs barriers imposed by the United States, based on presentations by the European Commission and the ECB.
There is palpable “concern” among Member States about the effects of a “real tariff war” that would result from a breakdown in negotiations, a European source said on Tuesday 8 April, as global financial markets fell sharply in recent days following President Donald Trump’s announcements (see other news).
The budgetary impact of increased military spending in the EU will also be discussed. This spending should contribute “a few tenths of a percentage point” to additional growth, according to this source. They will also increase the national public debt/GDP ratio, which will have to be “closely monitored in order to preserve the sustainability of public finances over the medium term”.
The situation in Germany will be scrutinised, where the future chancellor, Friedrich Merz, will pursue a proactive policy of investment in defence and infrastructure by reforming the ‘debt brake’ enshrined in the German constitution.
The chair of the European Parliament’s Committee on Economic and Monetary Affairs, Aurore Lalucq, will participate in this discussion, which will continue at the European finance ministers’ luncheon on the same day in Warsaw.
On Friday, Member States will not have to say whether they will activate the Stability and Growth Pact’s national opt-out clause, which will allow them to deviate from their public spending trajectory in order to increase military spending (see EUROPE 13612/25).
“Early indications are that there will be more than a few”, noted the source. She also acknowledged that the possibility of activating the Pact’s general escape clause at EU level, which would be made possible by a major downturn in the economic situation, had been raised. But this discussion never really got off the ground.
Spring meetings. The Eurogroup will also prepare for the IMF’s and the World Bank’s spring meetings (21-26 April, Washington).
Donald Trump’s return to power is reshuffling the cards and raising questions about the role of these international bodies, which usually focus on exchange rate and inflation issues.
It remains to be seen to what extent these forums will continue to play a role in resolving problems of international economic coordination, said this source, expecting that “[this] will depend a lot on the willingness of the US administration to engage within these bodies“. (Original version in French by Mathieu Bion)