Eurogroup , 18 May 2021

ecfin.cef.cpe(2021)3328543

Eurogroup Work programme until December 2021

Eurogroup Work programme until December 2021

The COVID-19 pandemic has caused an unprecedented economic shock of high human costs and deep social repercussions. Unprecedented steps to mitigate the impact of the crisis were taken at the national, area and EU level. A vigorous policy response was put in place to support the economy, citizens and businesses with the Next Generation EU being a vital part of that strategy.

The Eurogroup has been at the forefront of the economic policy response and it will continue to play a key role in the euro area in identifying, coordinating and implementing the policies that will deliver a robust, inclusive, and sustainable recovery.

Strengthening the euro area economy is essential for the recovery and the return to a sustainable growth path. Through its high-level discussions, the Eurogroup will be a forum for promoting common understanding on challenges and defining appropriate policies within the euro area. The Eurogroup will continue to pursue the goals of deepening the Economic and Monetary Union and completing the Banking Union, and address in its discussions how to best leverage the opportunities brought by the green and digital transition, including the potential development of a digital euro. It will involve non-euro area Member States in matters of common interest. It will work closely with the EU Institutions and the Council Presidency to achieve its policy priorities.

The Eurogroup’s priority policy areas

In the second half of 2021, the Eurogroup will focus its work on a number of priority policy areas:

Economic and fiscal policies to support the recovery and long-term growth.

The implementation of effective, concerted, and sustainable policies to stabilize the economy and support the recovery requires intense policy dialogue and coordination. The Eurogroup will also seek to promote structural reforms and investments that foster recovery and convergence within the Economic and Monetary Union, while also contributing to the goals of a green and digital transitions.

The Eurogroup will continue to hold thematic discussions with the aim of reaching a shared assessment of the impact of the pandemic and its potential implications for the euro area economy, notably in terms of convergence, as well as the lessons learnt from Europe’s comprehensive economic policy response. The aim will also be to share good practices and identify the policy measures that best support the recovery. Building on previous discussions, the health of the corporate sector in the euro area will be a key element of attention. The Eurogroup has regularly discussed the efficiency of insolvency frameworks and their role in the adjustment will likely feature again in our discussions.

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The annual assessment of Draft Budgetary Plans will be the time to provide guidance on the overall fiscal stance of the euro area and the fiscal plans of the Member States for next year.

The Eurogroup will also exchange views on the future of fiscal policy in the euro area, reflecting on the fiscal strategy for the medium-term, with a focus on the elements relevant for the euro area as customary. When the recovery takes hold, the Commission intends to relaunch the public debate on the economic governance framework. This will provide an opportunity to review the effectiveness of fiscal surveillance and economic governance in the euro area.

The euro area Recommendations will allow the Eurogroup to support a coherent policy mix across a broad range of economic and fiscal policies, which is all the more relevant in the context of the recovery and the implementation of national Recovery and Resilience Plans. The Eurogroup will continue to discuss policies that address longer-term challenges, such as higher and targeted investment in the green and digital transitions, and structural reforms to support long-term growth, with a view to fostering mutual learning and spreading best practices.

Finally, the Eurogroup will monitor macroeconomic and fiscal developments regularly and hold discussions on structural reforms. In this context, additional discussions on macroeconomic developments and policy prospects may be envisaged.

Strengthening the Banking Union.

The efforts undertaken in the last decade to strengthen supervision and regulation in the banking sector have ensured the resilience of the financial sector during the pandemic. Well-functioning financial markets within the Banking Union and the are key to support the recovery by providing financing to households and businesses. In November 2020, the Eurogroup took stock of the progress made in risk reduction in the banking sector and on that basis agreed that the common backstop to the Single Resolution Fund enters into force by the beginning of 2022, two years earlier than planned. Under the mandate received by the Eurosummit of December 2020, the Eurogroup in an inclusive format is working towards the preparation of a stepwise and time-bound work plan on all outstanding elements needed to complete the Banking Union and stands ready to continue the work on a consensual basis and in a holistic manner on completing the Banking Union. The March 2021 Eurosummit reiterated that making progress towards a true Capital Markets Union remains essential to support the financing of the economy, complement the Banking Union, and strengthen market-based adjustment mechanisms in the euro area. In light of the impact of the current crisis, achieving these objectives is critical and will be fully supported by the Eurogroup.

The euro as a digital .

New technologies in banking and payments are giving rise to new services and business models by established financial institutions and new market entrants. Analysis of digital is being undertaken by international institutions, governments and central banks all over the world.

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Informed by preliminary work by the ECB, the Eurosummit in March 2021 concluded that exploratory work on the possible introduction of a digital euro should be taken forward. A properly-designed digital euro has the potential to foster innovation and unlock major benefits for citizens, businesses, Member States and the overall functioning of our economic and monetary union, building on mutual trust and engagement among all stakeholders involved. The Eurogroup supports the work carried out by the on a digital euro. This work needs to build on careful and thorough analysis.

The digital euro is a complex and important project given its potentially far-reaching repercussions for citizens, businesses, and the EMU as a whole. The Eurogroup will therefore revert to this topic regularly and discuss its various dimensions, focusing on their political relevance, in full respect of the institutional roles and mandates of all actors involved.International role of the euro.

The euro is an important international currency. The Eurogroup will continue to discuss how to strengthen its role on the international stage. This discussion will first and foremost aim at making the euro area more robust by pursuing sound economic policies, notably deepening the EMU, completing the Banking Union, and the Capital Markets Union. The Euro-Summit in March 2021 underlined the need to foster Europe's leadership in green finance. The Eurogroup intends to discuss the political dimensions of the development of the euro as the currency of the sustainability transition. Preserving and further increasing the attractiveness of EU financial markets for sustainable finance will be key in this context, building on Europe’s head start in the issuance of green, social, and sustainable bonds. Indicative Work Programme

The Eurogroup will also seek to foster high level policy debates and exchange of views with international partners to deepen the relations in the economic and financial spheres, inviting external speakers to enrich and bring additional perspectives to our discussions. Building on the recent accession of and to ERM II, the Eurogroup will continue to monitor the plans and actions of non-euro area Member States' related to the introduction of the euro in the Member States as needed.

The work programme for Eurogroup meetings until December 2021 builds on the priorities listed above. Particular importance will be given to strengthening the connection with European citizens and increasing their sense of ownership of the euro and of the Economic and Monetary Union. The Eurogroup is committed to implementing its transparency policy. It will continue to paying attention to clear communication to citizens.

Given the current uncertain environment, the Eurogroup work programme should be seen as indicative. Flexibility is key for ensuring swift reactions to possible future unexpected developments. In particular, the Eurogroup will continue monitoring the economic situation, policy response and recovery needs after the COVID19 pandemic. Furthermore, the Eurogroup - will prepare and follow up to the meetings.

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Proposed agenda of upcoming meetings

Eurogroup on 12 July  Euro area fiscal stance  (poss.) The euro as a digital currency – stock-taking  (poss.) Facilitating economic adjustment and the corporate restructuring in the euro area in the post-Covid-19 recovery  (in inclusive format) Banking Union - Debrief of and follow-up to the June Euro Summit  (poss. in inclusive format) International relations in the monetary and financial area - exchange of views with an external guest

Eurogroup on 10 September (Informal)  Exchange of views with the Chair of the ECON Committee of the on the economic situation and outlook  (poss.) International role of the euro – the euro and the green transition  Thematic discussion on convergence in the euro area

Eurogroup on 4 October

 Macroeconomic and fiscal developments and policy prospects in the euro area  Preparation of international meetings, including exchange rate developments and global imbalances  (poss.) Stocktaking of the implementation of euro area priorities in the Recovery and Resilience Plans and lessons learnt from the European response to Covid-19  – 11th enhanced surveillance report  (in BU format) Banking Union Update: including reporting on operational aspects. o Fourteenth hearing of the Chair of the Supervisory Board o Reporting on recent activities of the Single Resolution Board

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Eurogroup on 8 November

 Macroeconomic developments, including inflation, and policy prospects in the euro area  Medium-term fiscal strategy for the euro area  (poss.) Digital euro – state of play in the context of global Central Bank Digital Currencies  (poss.) Debrief on international meetings  Thematic discussion: solvency of the corporate sector: financial distress and its potential impact on the real economy  (poss. in inclusive format) Banking Union: o Progress on the completion of the Banking Union and developments in the banking sector o Stock take on the establishment of the common backstop to the Single Resolution Fund

Eurogroup on 6 December

 Assessment of euro area Member States' Draft Budgetary Plans and of the euro area budgetary situation and prospects  Euro area recommendation – presentation by the Commission  Post Programme Surveillance: o – 11th surveillance report o – 14th surveillance report o Ireland – 15th surveillance report o – 16th surveillance report  Greece – 12th enhanced surveillance reports  (poss.) IMF Article IV: mission to the euro area  Eurogroup work programme for I/2022  (poss.) Preparation of the December Euro Summit

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