The President of the Eurogroup, Paschal Donohoe, takes stock of the work carried out by the finance ministers of the euro area countries since March (see EUROPE 13600/14), in a letter sent to European leaders ahead of the Euro Summit scheduled for Thursday 23 October in Brussels.
Among the issues addressed is the “urgent” digital euro project, which is the subject of a legislative package on which the Danish Presidency of the Council of the EU aims to reach a political agreement in principle (‘general approach’) by the end of 2025.
Mr Donohoe noted that the Eurogroup, meeting in its inclusive format in mid-September in Copenhagen, resolved a political deadlock by establishing a process for setting a holding ceiling for the future digital central bank currency and for the final decision to issue the digital euro (see EUROPE 13713/7).
This framework “aims to ensure robust political legitimacy for the project including a discussion in the European Council prior to the ECB announcement of the envisaged date of issuance”, notes Mr Donohoe.
On the integration of capital markets, which is still lagging behind in the EU compared to other regions of the world, “the time for decisive action is now”, says the President of the Eurogroup, who was re-elected in July for a third term. The first test will be to reach agreement in the Council on the proposal to revitalise the financial securitisation market.
Finally, in terms of economic governance, Mr Donohoe points out that the Eurogroup advocates fiscal responsibility. Set in July, the budgetary guidelines for 2026 at euro area level stress that, “excluding defence-related expenditure, fiscal restraint remains appropriate” (see EUROPE 13675/3). In the medium term, we will have to “reclassify” policies in our budgets to take account of increased military spending, warns the Irish minister.
The Eurogroup expects “moderate” growth in 2025, driven in particular by “robust” domestic consumption, despite geopolitical and international trade tensions.
Link to Mr Donohoe’s letter: https://aeur.eu/f/j17 (Original version in French by Mathieu Bion)