On Wednesday 12 November, the finance ministers of the euro area countries will take stock of the macroeconomic situation. They will also discuss the role of the Eurogroup in the budgetary surveillance architecture and discuss the work in progress on the digital euro.
Overall, the macroeconomic situation in the euro area has hardly changed since the October ministerial meeting. The economies of the euro area countries remain resilient, with inflation under control and unemployment low, despite some headwinds that could cause growth to slow, such as the uncertainty linked to geopolitical tensions.
The Eurogroup discussion will be supported by presentations by the European Commission of its autumn economic forecasts, due on Monday 17 November, and by the ECB of its decision to maintain its key interest rates (see EUROPE 13742/4).
On this basis, the ministers will hold a strategic discussion on the main macroeconomic challenges facing euro area countries, with one European source referring to “access to critical raw materials, the rise of artificial intelligence and the emergence of stablecoins”.
On budget matters, the Twenty will consider the role, complementary to that of the Ecofin Council, that the Eurogroup should play within the European framework for economic governance. Such a role could be expressed in the definition of the macroeconomic scenarios underlying the multi-annual budget programmes that each EU country has adopted in accordance with the revised Stability and Growth Pact.
Banking union. As part of the regular dialogue on banking union, the Chair of the ECB’s Single Supervisory Mechanism (SSM), Claudia Buch, will brief ministers on the solidity of the banking sector, while the Chair of the Single Resolution Board (SRB), Dominique Laboureix, will give a presentation on the ability of major European banks to be restructured in the event of failure.
The current difficulty for banking institutions to acquire other banks within the same country or on a cross-border basis (see EUROPE 13728/18) could be brought into the debate.
“In theory, there is a wide recognition that cross-border mergers are a desirable thing in the banking sector, but in practice political issues interfere”, noted this European source.
Digital euro. Finally, meeting in inclusive format, the Eurogroup will take stock of the legislative work in progress to facilitate the creation of a digital euro by the ECB, both in the Council of the EU and in the European Parliament (see EUROPE 13747/21), following the European Council’s call for this work to be finalised rapidly and the ECB’s decision to launch the technical preparations for issuing the digital euro (see EUROPE 13742/3).
The discussion could extend to the issue of stablecoins, and in particular the US decision to promote dollar-based stablecoins issued to private companies. While the ECB is advocating a tightening of the European ‘MiCA’ regulation for reasons of financial stability in the euro area (see EUROPE 13725/27), the Commission remains of the opinion that European legislation is sufficient to deal with such issues. (Original version in French by Mathieu Bion)