Tag Archives: eurozone

Croatia enters Eurozone

Strasbourg 05.07.2022 MEPs on Tuesday gave a favorable opinion to Croatia’s bid to become the newest member of the eurozone from the 1st January 2023.

Parliament, by 539 votes in favour, 45 votes against and 48 abstentions, adopted the report of Siegfried Mureșan (EPP, RO) stating Croatia fulfils all the criteria for adopting the euro on 1st January 2023.

The report notes that, despite the evaluation of Croatia’s readiness taking place against the backdrop of the COVID-19 pandemic, high inflation, and Russia’s war against Ukraine, Croatia continues to be ready to adopt the euro.

MEPs also state that Croatia already has a higher level of price convergence with the eurozone compared to other member states on their adoption of the euro. Nonetheless, Parliament expects sustained efforts from the Croatian government to ensure further price convergence and that the introduction of the euro does not lead to artificial price increases.

The rapporteur Siegfried Mureșan (EPP, RO), said: “The reforms undertaken by the Croatian Government in the last years have strengthened the economy and paved the way for Croatia joining the common currency. It is clear that becoming a member of the euro is the right decision for the country, its businesses and citizens, as well as various sectors of its economy, such as tourism.

Croatia becoming the 20th member of the euro area is good for the European Union as well: it shows the viability and trust in our common currency”.

The Chair of the EP’s euro working group, Margarida Marques (S&D, PT), said:

Croatia’s accession to the single currency in 2023 is the first significant European integration process since Brexit and marks a further enlargement of the euro in the Balkans. When European values are being challenged at our borders, this is a clear sign of unity, further integration and a contribution to the strength of the euro as a global currency.

The adoption of the euro by Croatia shows that the single currency is a stimulating and solid project that guarantees greater security and stability for citizens.

Parliament’s opinion will be forwarded to Eurozone member states who are responsible for giving the final clearance for Croatia to adopt the euro.

Paschal Donohoe new Eurogroup president

The Eurogroup today elected Paschal Donohoe, Minister for Finance and Public Expenditure & Reform of Ireland, as President of the Eurogroup, in line with Protocol 14 of the EU treaties.

The new President will take office as of 13 July 2020 and will serve a two and a half year term.

The first Eurogroup meeting under Paschal Donohoe’s presidency is currently planned for 11 September 2020.

Paschal Donohoe was appointed Minister for Finance of Ireland in June 2017.

The Eurogroup is an informal body where ministers of euro area member states discuss matters of common concern in relation to sharing the euro as the single currency. It focuses in particular on the coordination of economic policies. It usually meets once a month, on the eve of the Economic and Financial Affairs Council meeting.

Centeno on pandemic crisis support

…”Today, we have welcomed the initiative of the EIB to create a pan-European shield which aims to guarantee 200 billion euros of lending with a focus on small and medium-sized enterprises. Again, this scheme is based on our collective financial strength at the national and European levels. Because we are stronger together. That is the safety net for firms” said the president of the Eurogroup Mario Centeno after the COVID-19 pandemic crisis meeting via telecommunication.

“Finally, the safety net is for member states. Today, we agreed to establish Pandemic Crisis Support for the amount of 2% of member states’ GDP. That is close to €240b. This is an important safeguard for all euro area countries during these times of crisis. It will be available to all ESM members, with standardised terms, on the basis of an up-front assessment by the European institutions.

Any euro area country requesting this support remains subject to the EU’s economic and fiscal co-ordination and surveillance frameworks. The only requirement to access the credit line will be that the country would commit to using these funds to support domestic financing of direct and indirect healthcare, cure and prevention related costs due to the COVID 19.

I should add that, my interpretation, as President, is that the average Euro Area Member State affected by the COVID-19 crisis should be able to identify expenditures directly or indirectly related to healthcare, cure and prevention amounting to 2% of GDP.

This agreement shows we have the political will and flexibility to take the instruments we created during the last crisis – in this case the ESM – and make them relevant and appropriate for the current crisis. We would strive to make this Pandemic Crisis Support operational within two weeks.

Those were the three new EU safety nets I wanted to talk about today. They add up to around half a trillion euros: a step-change in the economic coordination within our Union. This emergency plan will shield our economic and social fabric, as we dive into a recession.

When the health crisis abates, we will need to spur economic recovery. It is imperative that we grow together, and not apart, and that we protect the internal market in doing so”.

EUCO: anti-COVID19 plan

The 27 EU leaders decided to offer the eurozone finance ministers two weeks to find a common economic response to the coronavirus crisis, European diplomats said. After more than six hours of discussion by video-conference, the heads of state and government of the 27 EU countries have reached agreement on a draft joint declaration to tackle the crisis caused by the coronavirus.

“We take note of the progress made by the Eurogroup. At this stage, we invite the Eurogroup to present proposals to us within two weeks. These proposals should take into account the unprecedented nature of the COVID-19 shock affecting all our countries and our response will be stepped up, as necessary, with further action in an inclusive way, in light of developments, in order to deliver a comprehensive response” the declaration reads.

“The COVID-19 pandemic constitutes an unprecedented challenge for Europe and the whole world. It requires urgent, decisive, and comprehensive action at the EU, national, regional and local levels. We will do everything that is necessary to protect our citizens and overcome the crisis, while preserving our European values and way of life.

“We recognise the burden these measures put on all our citizens and praise their sense of responsibility. We express our deepest sympathy with the victims of the pandemic and their families. We commend the dedication and tireless efforts of the healthcare professionals at the forefront of the outbreak and the contribution of those who provide essential services to the population.

“We will cooperate with the international community and our external partners in combating the global pandemic.

“We will continue to work along the five strands defined at our videoconferences on 10 and 17 March 2020 and do what is necessary to overcome the crisis.”

Italian Prime Minister Giuseppe Conte did not accept the draft conclusion at a video conference Summit of EU27 to find a common economic response to the coronavirus pandemic, according to Italian government sources. Italy wants the European Union to acquire “innovative financial instruments that are truly adapted to war”, according to the Italian agency Agi, which quotes the entourage of the Prime Minister. In this response to the economic catastrophe that threatens the EU, the proponents of greater financial solidarity, the countries of the south, less virtuous in budgetary matters, and those of the north, confront each other.

Merkel excluded debt releif for Italy

German Chancellor Angela Merkel has excluded debt relief for Italy, explaining in a newspaper interview published on Sunday (3/06/2017) that the principle of solidarity among eurozone member states should not turn the single currency bloc into a debt-sharing union.

While cohesion among members of the single currency bloc is important, “solidarity among euro partners should never lead to a debt union, rather it must be about helping others to help themselves” – Merkel continued.

Chancellor made her remarks when asked about a media reports about Italy’s eurosceptic 5-Star Movement and Northern League (Lega Nord) had planned to ask the European Central Bank to forgive 250 billion euros ($296 billion) of Italian debt.

Charlemagne Prize: Macron calls for EU unity

President Emmanuel Macron received the Charlemagne Prize #Karlspreis in Aachen in recognition of his vision of a new Europe.” In his acceptance speech, Macron put forward his long-term goals for the European 27 member-states bloc.

Charlemange tomb

French President is recognized for his contributions to European cohesion and integration as he receives the Charlemagne Prize in the German city of Aachen.

In his acceptance speech, Macron gave the highest esteem the European project for maintaining a “miraculous” 70 years of peace on the continent and outlined the his vision for the future.

Macron calls for unity among member states and warns that the divisions that appeared during the eurozone and migrant crisis risk to undermine the EU project.  He also insists that a common eurozone budget is crucial to guarantee the EU unity. The President urges Germany to get over its “fetish” for budget surpluses and work with him on forging deeper economic co-operations.

#EUCO: president Donald Tusk invitation

“At the upcoming spring European Council we will focus on trade and the planned US tariffs, the economic situation in the EU, digital taxation as well as Turkey and Russia. Additionally, we will discuss Brexit at 27 and the euro area reforms in the Euro Summit formation of 19 Leaders” – says the text of the letter issued by the European Council president Donald Tusk ahead of the March Summit #EUCO.

“First we will discuss trade. On this issue, we stand by the European Commission, which is currently holding talks with our American friends on how to exempt the EU from the planned steel and aluminium tariffs. We must prepare for all possible scenarios. As the world’s biggest trading power, the EU’s response will be responsible and reasonable. Free and fair trade has created millions of jobs in Europe, and elsewhere, contributing to peace and stability all around the world. As Montesquieu put it, ‘the natural effect of trade is to further peace’. Therefore, we will always want more trade, not less. Hence our recent trade deals with Canada, Japan, Singapore and Vietnam, the ongoing talks with Mercosur and Mexico, and planned trade discussions with Australia and New Zealand.”

“When the US raised tariffs in 1930, which applied to 1/3 of our trade, it led to a global trade war. The tariffs currently proposed, if implemented, would affect around 1,5% of transatlantic trade. I bring these numbers up not to diminish the need for a suitable, WTO-compatible response – indeed, such a response would be inevitable given the number of potentially affected jobs in Europe. But I do this to demonstrate the broader perspective. Transatlantic relations are a cornerstone of the security and prosperity of both the United States and the European Union. Given the importance of this relationship, we should continue to engage with the US in order to strengthen the transatlantic economic relationship, not weaken it. Despite seasonal turbulences.”

“When it comes to Brexit, we will discuss how to approach the rest of the negotiations with the UK, including on our future relationship. I want us to have a broad debate on our negotiating strategy. In this context I will ask you to adopt a first set of guidelines on the future relationship with the UK. Additionally, yesterday our negotiators reached a solution on parts of the withdrawal agreement. Whether all 27 Member States can welcome this at the European Council remains open. I still need a couple more hours to consult with some of the most concerned Member States. To me, one thing is clear. We have achieved success when it comes to citizens’ rights and the financial settlement. As I have stated from the very beginning of these negotiations, defending the rights of our citizens will be the number one priority for the EU. And we have made it. European citizens will be fully protected from the consequences of Brexit. This also means that our citizens crossing the Channel in this period will not get worse treatment than those who did so before. This is good news for all Europeans. As regards the most contentious issue, namely Ireland, Prime Minister May has reassured me that she accepts all options agreed in December to be on the negotiating table. Including the option of full regulatory alignment between Ireland and Northern Ireland if there is no other possibility to avoid a hard border. This bodes well for the rest of the negotiations.”

“Last but not least, on Russia. Following the Salisbury attack we should not only express our full solidarity with the UK but also draw operational conclusions, as this incident poses a challenge to our shared security. I therefore propose we strengthen our resilience to Chemical Biological Radiological and Nuclear-related risks, including through closer cooperation among the EU institutions, our States and NATO. We should also continue to bolster our capabilities to address hybrid threats, including in the areas of cyber, strategic communication and counter-intelligence.”

“As for the meeting agenda: after our traditional exchange of views with European Parliament President Tajani at 15.00 on Thursday, Prime Minister Borissov will give us an overview of progress in implementing our previous conclusions, including ongoing work on the reform of the Common European Asylum System. Then we will have a full discussion on trade and adopt relevant conclusions. We will also adopt the decision appointing the Vice-President of the ECB. Following that, European Central Bank President Draghi will join us for an exchange on the current economic situation in the EU and we will adopt conclusions in this domain. Finally, before we break for our press conferences, I will invite Eurogroup President Centeno to inform us on the ongoing work in the Eurogroup on the Banking Union.”

“Over dinner I hope to have an open and frank political debate on taxation, on the basis of the enclosed Leaders’ note and without written conclusions at this stage. Following from the discussion we had at our informal meeting in February, we will also review recent developments with Turkey, with a view to the high-level meeting scheduled to take place in Varna on 26 March. At the end of our dinner we will adopt conclusions following the Salisbury attack.”

“On Friday, we will reconvene at 27 to review progress on negotiations with the UK and adopt guidelines on the framework for our future relationship. Finally, the Leaders of the euro area Member States will have an open debate on the long-term development of our Economic and Monetary Union, based on the other Leaders’ note. Our meeting should end before lunch.”

Juncker confident in France economy

France is on its way to tidy up its public finances, the European Commission president said on Monday, signaling confidence in the economic changes pursued by French President Emmanuel Macron before euro zone reform talks.

“France, with no doubts, will manage to bring its deficit level below 3 percent in 2017,” Jean-Claude Juncker told reporters, praising labor market reform proposed by the French government in August.

EU fiscal rules require the 28 member states to keep their public deficits below 3 percent of gross domestic product. Those who are above the ceiling are put under disciplinary procedures that could lead to financial sanctions.

Austrian politicians disapprove of Juncker’s voluntarism

Austria’s Social Democrat Chancellor Christian Kern and conservative Foreign Minister Sebastian Kurz rejected European Commission chief Jean-Claude Juncker’s vision to expand eurozone to the East and a border control free zone.

In his annual State of the European Union speech (#SOTEU2017), Juncker suggested a vision of a post-2019 EU where some 30 countries would be using the euro, with an EU finance minister running key budgets to give assistance to economies in trouble.

Kern, who is running against Kurz in parliamentary elections on Oct. 15, told ORF radio there was no point in expanding the euro and Schengen zone as long as tax fraud, the practice of contracting out work to lower-cost eastern European firms and breaches of limits for government debt had not been ended.

“It simply makes no sense to enlarge the euro zone before this has not been dealt with, because (otherwise) problems would get bigger,” Kern said, pointing to Greece’s struggle for years on the verge of bankruptcy as a prime example of such problems.

“If you like this is an expansion of the problems at the end of the day and not a plus in European cooperation. I think this concept is not thought through.”

Kurz also pointed to Greece as a bad example of including countries which do not fulfil the conditions for public finances.

“The euro and the Schengen zone is open for everybody, but only for those that fulfill the criteria… We must avoid another situation like the one in Greece,” Kurz said.

Greece awaiting debt relif

Debt relief for Greece will be looked into at the next Eurogroup meeting on 22 May, according to Jeroen Dijsselbloem. The president of the informal body of the eurozone’s finance ministers made the announcement during a plenary debate in Parliament on 27 April. He also apologised to MEPs about recent remarks that proved controversial.

Dijsselbloem attended a plenary debate on the second review of the economic adjustment programme for the country. The Eurogroup president said debt relief was a possibility: “Last year we gave that commitment to come back to this issue of [debt] sustainability for Greece because that’s the only way they will come back on a sustainable path and a sustainable economic future.”

Economics commissioner Pierre Moscovici, who also took part in the debate, added:  “The Commission will continue to support efforts to make Greek debt more sustainable. We believe it’s necessary and possible.”

Greece is currently in the middle of its third bailout programme since the financial crisis. On 2 May, Greece reached a preliminary technical agreement with its creditors, which means the country is set to have the next tranche of funding approved in time for its next debt repayments of €6 billion in July.

Greece’s primary budget surplus, an important indicator of the country’s public finances, increased to 3.9% last year, beating all the creditors’ targets, according to data from Eltat , the national statistics service.

During the debate in plenary Roberto Gualtieri, an Italian member of the S&D group, said the news about the primary surplus for 2016 showed that the Greek economy was at a turning point and urged the next Eurogroup meeting to formally conclude the current review and address debt relief.

Ska Keller, the German chairs of the Greens/EFA group,  said that now that Athens had delivered, it was time for the Eurogroup to do its part and give Greece its debt relief.

Two Greek MEPs – ECR member Notis Marias GUE/NGL member Dimitrios Papadimoulis – both highlighted the current devastating state of the Greek economy with Marias calling it a “social cemetery”.

Apart from the economic situation in Greece, MEPs addressed recent controversial statements by Dijsselbloem  in an interview with German newspaper Frankfurter Allgemeine Zeitung, in which he was quoted as saying about southern European countries: “You cannot spend all the money on drinks and women and then ask for help.”

“I really regret the comments you made recently on southern countries because the social distress that many of our citizens are suffering deserves more than that,” – Françoise Grossetête, a French member of the EPP group, said.

“Many members of the Parliament have been very critical about my remarks, and of course I fully accept that. The choice of words has been unfortunate and people have been offended and I regret that,” – Dijsselbloem replied.

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