On Monday 7 July, the twenty Finance Ministers of the euro area countries will elect their President from among their peers for a two-and-a-half-year term starting on Saturday 12 July.
The candidates are Ireland’s Paschal Donohoe – the outgoing President who has been in office since July 2020 (see EUROPE 12524/1) – as well as Spain’s Carlos Cuerpo and Lithuania’s Rimantas Šadžius (see EUROPE 13669/14). All three are actively campaigning behind the scenes. Mr Donohoe, who has been endorsed by his six Christian Democrat counterparts, seems to have the upper hand, even if the announcement of there being two rivals comes as a surprise and testifies to the covetousness of the position.
Led by the Cypriot minister for reasons of protocol, the election will take place by a simple majority of Member States, with a candidate needing at least eleven votes to be elected. If none of the candidates obtain the required number of votes in the first round, they may decide to maintain their candidacy or withdraw it in subsequent rounds.
On Thursday 3 July, a European source expressed his “great confidence” in the Eurogroup’s ability to reach a result by Monday.
It will be up to the future President to set the Eurogroup’s work programme, in particular the next stages of the banking union project following the provisional interinstitutional agreement on the ‘CMDI’ package to strengthen management of banking crises (see EUROPE 13668/10).
Budgetary orientation. In addition, the ministers will issue a declaration setting out the fiscal policy stance for the euro area in 2026.
The commitments made by the Member States to increase their military spending will have an impact on this direction, even if, according to this source, it is tricky at this stage to know what the scale and speed of this increased spending will end up being.
Instead of being slightly restrictive, as recommended by the Eurogroup in February (see EUROPE 13578/30), the euro area’s fiscal stance for 2025 should already be “close to neutral”, said this source, notably because of the increase in defence spending.
It is also important to note that the ‘European Fiscal Board’ will present its recommendation to set a restrictive budgetary stance, excluding military spending, at the level of the euro area for 2026 (see EUROPE 13665/27).
On Monday, the German minister could give his counterparts an indication of Germany’s economic and budgetary policy since the Merz government has yet to present either its draft budget plan for 2025 or the multiannual budget programme, which could extend over seven years.
EMU. After validating Bulgaria’s compliance with all the convergence criteria (see EUROPE 13663/5), the ministers will review preparations aimed at helping this Member State to become the twenty-first country in the euro area as of January 2026.
The following day, the Ecofin Council will adopt all the legislative acts required for a smooth transition, including the final exchange rate between the Bulgarian lev and the euro.
International role of euro. In the presence of the President of the ECB, Christine Lagarde, the Eurogroup, who will be meeting in an inclusive format, will discuss the position of the euro as the world’s second reserve currency.
The context, which is shaped by the US offensive on payment markets through the launch of dollar-based stablecoin, increases the urgency to rapidly set up a digital euro. The ECB regards this as a question of European sovereignty.
In the coming weeks, the Eurogroup is likely to be asked to provide guidance on the outstanding political issues, namely: - governance relating to limits on the holding of digital euros; - protection of privacy; - the ultimate political decision to launch the digital euro, following the adoption of the dedicated legislative package.
This issue will be on the agenda of the Ecofin Council on Tuesday 8 July.
See the progress report of the previous Polish Presidency on the legislative work of the EU Council relating to the digital euro: https://aeur.eu/f/hon
CMU. Following on from its March 2024 declaration on deepening capital markets (see EUROPE 13368/3), the Eurogroup will welcome the President of the EIB, Nadia Calviño, who will present the EIB's initiatives in support of the Capital Markets Union and the Savings and Investment Union.
According to a European diplomat, Ms Calviño is expected to detail the measures designed to improve access for SMEs to capital markets, the EIB’s contribution to the EU’s regulatory simplification efforts, and the potential routes for relaunching the securitisation market (see EUROPE 13661/26).
After the summer, the Eurogroup will assess the performance of the EU’s capital markets, as well as the development of national initiatives in this area, according to this diplomat. (Original version in French by Mathieu Bion with Bernard Denuit)