038961/EU XXVII.GP Eingelangt Am 11/11/20
Total Page:16
File Type:pdf, Size:1020Kb
038961/EU XXVII.GP Eingelangt am 11/11/20 Eurogroup The President Brussels, 9 November 2020 ecfin.cef.cpe(2020)7147500 To the members of the Eurogroup Subject: Eurogroup meeting of 3 November 2020 Dear colleagues, I would like to share with you the main content and course of our discussions at the Eurogroup meeting held on 3 November by videoconference. The recent horrific attacks in France and Austria were on all our minds and we expressed our condolences to our French and Austrian colleagues. The Commission was represented by Vice-President Valdis Dombrovskis and Commissioner Paolo Gentiloni. Commissioner Mairead McGuinness joined us for the strategic discussion on the digital euro. Our meeting was also attended by ECB President Christine Lagarde, ECB Executive Board member Fabio Panetta and ESM Managing Director Klaus Regling. For the first item, we also welcomed Dr Andrea Ammon, the Director of the European Centre for Disease Prevention and Control (ECDC) and Irene Tinagli, the Chair of the European Parliament’s ECON Committee. Following the entrance of Bulgaria and Croatia in the Banking Union, we held our first Eurogroup meeting in Banking Union format. To this end, we welcomed Ministers Kiril Ananiev from Bulgaria, DQG=GUDYNR0DULüfrom Croatia, who joined us for the last item of the agenda. We also welcomed Elke König, Chair of the Single Resolution Board, and Andrea Enria, Chair of the Supervisory Board of the ECB, for this item. 1. Covid -19 - economic outlook and challenges in the euro area and global economy. Exchange of views with the Chair of the European Parliament's Economic and Monetary Affairs Committee Rue de la Loi/Wetstraat 175 - 1048 Bruxelles/Brussel - Belgique/België www.consilium.europa.eu 1/5 www.parlament.gv.at Dr Ammon set out the most recent epidemiological developments of the COVID-19 pandemic. The second wave of the spread of the virus has prompted tightening restrictions across the euro area and ministers shared information on their national approaches to targeting restrictions to enhance the health benefits while minimising the economic costs. There was also interest from ministers in prospects for vaccine roll-out and treatment options, and while these could present upside risks to the economic outlook, there was broad recognition of the prevailing exceptional uncertainty and acknowledgement that social distancing measures will remain a key public health response in the near term. After a very strong economic rebound in the third quarter, the latest developments will inevitably have an impact on growth over the months to come. Ms Irene Tinagli provided her assessment of the latest economic developments and prospects and the European response to-date, stressing the importance of a strong and united European response to prevent a fragmentation of the Single Market. Ms Tinagli also raised the issue of the uneven social impact of the crisis, including within Member States, and I noted that this concern was echoed by a number of colleagues. Overall, I was pleased to note that our unity of purpose and our collaborative approach to this crisis remain intact. This unity delivered the three safety nets in the spring and underpins our view that the RRF needs to be finalised and implemented as soon as possible. We also have strong convergence on national policy priorities, notably on the importance of continuing fiscal support in 2021, which complements continued monetary policy support from the ECB. These elements were underscored in the statement we released at the end of the meeting (see annex). 2. Strategic discussion on the euro as a digital currency We held a strategic discussion on the basis of a presentation by the ECB of its Report on a Digital Euro, which outlines opportunities, challenges and design features of a possible central bank digital currency (CBDC). A digital euro would support the digitalization of the economy, and safeguard monetary sovereignty, in scenarios ranging from the continuing decline of cash usage to the development of global “stable coins” or entry of foreign digital currencies in the domestic market. Ministers see this issue as a top priority for Europe to be at the forefront of on-going developments in international finance and to foster our economy’s competitiveness. We agreed that a digital euro would be a major change that could bring benefits to European citizens, to businesses and to the European economy as a whole. We also concurred that the design and implementation of a digital euro pose challenges and deserve the most careful consideration, given the potential implications of the project for our monetary sovereignty, financial stability, financial inclusion, data protection, anti-money laundering, tax evasion and on the international role of the euro. Bringing such innovation to success will require building mutual trust and engagement among all stakeholders involved, with particular attention to our citizens. Rue de la Loi/Wetstraat 175 - B-1048 Bruxelles/Brussel - Belgique/België www.consilium.europa.eu 2/5 www.parlament.gv.at We commended the Eurosystem for its work on this matter, welcomed the ongoing public consultation and encouraged the ECB to pursue its work as expeditiously as practicable for the possible issuance of a digital euro. The Eurogroup will return to this issue on a regular basis. In Banking Union format: 3. Reporting on Banking Union operational aspects a. Twelfth hearing of the Chair of the Supervisory Board b. Reporting on recent activities of the Single Resolution Board We were informed by Andrea Enria, the Chair of the Supervisory Board of the ECB, about the measures adopted by the SSM to cushion the impact of the COVID-19 crisis on the banking sector. He also noted that banks were in a much better position in terms of capital and liquidity than in 2008, but cautioned about the challenges that could lie ahead depending on the pace of the economic recovery and the development of NPLs. He also informed ministers on Brexit preparedness of banks and the importance for banks to take climate change and a greener economy into account. Elke König, the Chair of the Single Resolution Board (SRB), debriefed us on the activities undertaken by the SRB in the last six months and the measures adopted in response to the COVID-19 crisis to provide flexibility to the banks under the SRB’s remit. She also updated the Eurogroup on resolution planning, resolvability, the build-up of the Single Resolution Fund (SRF) and stressed that banks must keep up the momentum on increasing MREL (minimum requirement for own funds and eligible liabilities). The Chair of the SRB highlighted the importance of completing the resolution framework and the relevance of the SRB’s work to support financial stability. Both Chairs emphasised the need to continue strengthening the Banking Union. Yours sincerely, Paschal DONOHOE Rue de la Loi/Wetstraat 175 - B-1048 Bruxelles/Brussel - Belgique/België www.consilium.europa.eu 3/5 www.parlament.gv.at Annex. 3 November 2020 Eurogroup Statement on COVID-19 developments this autumn At the outset of today’s Eurogroup meeting, members of the Eurogroup offered condolences to Austrian and French colleagues on the recent horrific attacks and reiterated that Europe will always stand together. Today, the Eurogroup had a thorough discussion on the economic outlook in view of current COVID-19 developments. The Eurogroup was briefed by the Director of the European Centre for Disease Control (ECDC), Dr. Andrea Ammon, on the ECDC’s analysis of the pandemic. The Chair of the European Parliament’s Committee on Economic and Monetary Affairs, Irene Tinagli, also participated in the discussion. The recent acceleration in the spread of the COVID-19 virus and the new containment measures have further increased uncertainty and are likely to weigh on the recovery. The Eurogroup is closely following health developments and monitoring the economic impacts and prospects. We will continue to coordinate and vigorously implement, at all levels, ambitious economic policies that complement the health response, protect jobs and bring forward the economic recovery, right across the continent. We took stock of the measures adopted so far and concurred that Europe has reacted forcefully to the pandemic. Coordinated responses have cushioned the economic impact of containment measures on citizens and companies. With the second wave of COVID-19 unfurling, Europe is now better equipped to weather the economic fallout. Back in April, the Eurogroup, together with non- euro area Members, had reached an agreement on three safety nets to be implemented by the European Commission, the European Investment Bank and the European Stability Mechanism for an overall amount of €540 billion. These are now in place, bolstering Member States’ crisis responses, providing much needed support to citizens and companies to help weather the crisis, and providing an additional line of defence for sovereigns. These safety nets at the European level complement the unprecedented levels of fiscal support put in place by national governments. The fiscal measures implemented at the national level in 2020 amount to 4% of GDP. These measures are in addition to liquidity support initiatives and the operation of automatic stabilisers. These fiscal supports have been enabled by the temporarily Rue de la Loi/Wetstraat 175 - B-1048 Bruxelles/Brussel - Belgique/België www.consilium.europa.eu 4/5 www.parlament.gv.at allowed departure from the budgetary requirements that would normally apply and the temporary State aid framework. The Eurogroup considers it vital that fiscal support in each Member State continues into 2021, given the heightened risk of a delayed recovery, and adjusts to the situation as it evolves. Moreover, the European Council agreed in July upon the Next Generation EU plan to support the regions and sectors most impacted by the COVID-19 crisis with a €750 billion fund.