Main results - Eurogroup, 16 June 2022

 

Meetings Thursday 16 June 2022

● Eurogroup   16/06/2022 22:38 | MEETING | Main results - Eurogroup, 16 June 2022   The Eurogroup decided to recommend that Croatia become the 20th member of the euro area. It issued statements on Greece and on the future of the Banking Union. It also prepared the Euro Summit of 24 June 2022. Eurogroup Eurogroup, 16 June 2022 Highlights from the Eurogroup meeting held on 16 June 2022 in Luxembourg Infographic - How EU countries join the euro areaSee full infographic Main results Regular format Euro area enlargement – Croatia Ministers discussed the euro introduction by Croatia, on the basis of the convergence reports by the Commission and the ECB. They decided to recommend that Croatia become the 20th member of the euro area. This is a very well-deserved achievement for Croatia, and it is a recognition by Eurogroup and the institutions of the European Union of the commitment and the extraordinary work of Prime Minister Plenković, Minister Marić and all of our colleagues in the government of Croatia fulfilling all of the steps that are needed to join our shared currency. It demonstrates that the euro, which this year marks its 20th anniversary as a physical currency, is a union that is growing and that will become stronger by growing. It is first and foremost a symbol of how we use our integration and our interdependence as a source of strength. And the decision by the Eurogroup to welcome Croatia into that family and the determination of Croatia to join our group is a sign of that resilience.Paschal Donohoe, President of the EurogroupEuro area member states recommend that Croatia become the 20th member of the euro area (press release, 16 June 2022) Joining the euro area (background information) Greece – end of enhanced surveillance The Eurogroup discussed the fourteenth enhanced surveillance report on Greece. The Eurogroup welcomed the assessment by European institutions that the necessary conditions are in place to confirm the release of the seventh tranche of policy-contingent debt measures, worth € 748 million. The Eurogroup issued a statement, which among other things, welcomes the European Commission’s intention not to prolong enhanced surveillance after its expiration on 20 August 2022, given the successful delivery of the bulk of Greece’s policy commitments. Given the progress that has been made by Minister Staikouras, the Greek government and the Greek people, we welcomed today the intention of the European Commission not to prolong the enhanced surveillance of the Greek economy after the expiry of the programme at the end of August. This is a very significant achievement. It was recognised as a landmark moment by the Eurogroup upon the presentation of progress by Minister Staikouras.Paschal Donohoe, President of the EurogroupEurogroup statement on Greece of 16 June 2022 (press release) Post-Programme Surveillance of Portugal, Cyprus, Spain and Ireland The Eurogroup was briefed by the European Commission and the ECB on the main findings of the post-programme surveillance reports on Cyprus, Portugal, Ireland and Spain. Eurogroup work programme for II/2022 The Eurogroup adopted its Work programme for the second half of 2022, covering the period from July until December.Eurogroup work programme (background information) Priorities of new Slovenian Government The Slovenian Minister presented the policy priorities of the new Slovenian government. This is standard practice in the Eurogroup when new governments take office. ECB debrief on the latest decisions of the Governing Council The ECB briefed Ministers on the latest monetary policy decisions of the Governing Council. Inclusive format Banking Union Ministers discussed the developments concerning the Banking Union, and adopted a statement on the future of the Banking Union. We agreed a plan today for very concrete actions that will further strengthen our Banking Union. We agreed that we will strengthen the common framework for bank crisis management and also for the rules governing the use of national deposit guarantee funds. The Commission will bring forward a proposal with regard to that. The Eurogroup made a political commitment to turn that progress into reality.Paschal Donohoe, President of the EurogroupEurogroup statement on the future of the Banking Union of 16 June 2022 (press release) Banking Union (background information) Preparation of the June Euro Summit As foreseen in the Treaty on Stability, Coordination and Governance (TSCG), the Eurogroup in inclusive format prepared the Euro Summit that is planned to take place on 24 June 2022.Euro summit (background information) European Council, 23-24 June 2022 Meeting information Luxembourg 16 June 2022 14:30 Preparatory documentsDraft agenda, Eurogroup Draft agenda, Eurogroup in inclusive format Draft annotated agenda, Eurogroup Draft annotated agenda, Eurogroup in inclusive format Outcome documentsList of participants List of participants, Eurogroup in inclusive format

I want to begin by wishing you all a happy Bloomsday. Today 100 years ago the great masterpiece Ulysses by James Joyce was published in Dublin. To ma… Press material Thursday 16 June 2022   ● Eurogroup   16/06/2022 21:58 | Statements and remarks | Remarks by Paschal Donohoe following the Eurogroup meeting of 16 June 2022   I want to begin by wishing you all a happy Bloomsday. Today 100 years ago the great masterpiece Ulysses by James Joyce was published in Dublin. To mark this special day in European and Irish literature, I presented to every member of the Eurogroup a copy of Ulysses in their own language. I was heartened by the number of colleagues who said they had either read it or were planning to read it. The theme of our Eurogroup meeting today was one of resilience. The steps that we are taking to deepen the resilience of the euro in the time ahead and the commitment that the Eurogroup has to maintain the resilience and robustness of the euro area in all circumstances. Today we made a number of decisions that are very tangible demonstrations of our commitment to that resilience and our commitment to deepen it further. We recommended, as the Eurogroup, that Croatia becomes the 20th member of our euro family - a very clear signal regarding the strength of the euro area and its growing membership. We also paved the way for the exit by the Greek economy from enhanced surveillance. And we agreed a plan today for very concrete actions that will further strengthen our Banking Union. I'll say a word about each of those decisions today, and I'll begin by the discussion with regard to Croatia. That discussion began by the Eurogroup welcoming the convergence reports that were published by the Commission and the ECB with regard to Croatia fulfilling the criteria that are necessary for their economy to join the euro. On the basis of the convergence reports that were presented to us, the Eurogroup has now recommended that Croatia adopt the euro from 1 January 2023. I look forward to this recommendation being formally adopted tomorrow by the Ecofin Council. This is a very well-deserved achievement for Croatia, and it is a recognition by Eurogroup and the institutions of the European Union of the commitment and the extraordinary work of Prime Minister Plenković, of Minister Marić, and all of our colleagues in the government of Croatia fulfilling all of the steps that are needed to join our shared currency. It demonstrates that the euro, which this year marks its 20th anniversary as a physical currency, is a union that is growing and that will become stronger by growing. It is first and foremost a symbol of how we use our integration and our interdependence as a source of strength. And the decision by the Eurogroup to welcome Croatia into that family and the determination of Croatia to join our group is a sign of that resilience. Secondly, we had a further sign of that resilience today when we discussed the progress of Greece with regard to their reform implementation and their macroeconomic outlook. The basis of that discussion was the 14th Enhanced Surveillance report presented by the Commission. We were able to see the very impressive resilience of the Greek economy, even when dealing with the shocks of a pandemic, forest fires, earthquakes, and now the energy and human consequences of a war. Despite all of those many, many challenges, we're seeing a continued commitment to the implementation of reforms within the Greek economy by the Greek government. And we're seeing very clear signs of the growing resilience of the Greek economy. So we welcomed the assessment by our institutions that the necessary conditions are now in place to confirm the release of the 7th tranche of policy contingent debt measures. Those measures are worth €748 million, and you'll find all the details of that decision in the statement that I issued earlier on this topic. Given the progress that has been made by Minister Staikouras, the Greek government and the Greek people, we welcomed today the intention of the European Commission not to prolong the enhanced surveillance of the Greek economy after the expiry of the programme at the end of August. This is a very significant achievement by the Greek government, by the people of Greece, and - combined with the earlier abolition of capital controls, combined with the full repayment of the IMF loans - another clear signal of the return to normality for the Greek economy and of the continued progress that has been made in economic policy since 2010, and in particular under the current Greek government. This was recognised as a landmark moment by the Eurogroup upon the presentation of progress by Minister Staikouras. And then finally, in the third sign of the resilience of our efforts, we have reached agreement on a further step forward on Banking Union. I have been making the case for the completion of Banking Union. The statement that the Eurogroup has issued this evening underlines the commitment to, at the right time, complete Banking Union. You can't complete a project if you don't take every opportunity to strengthen it step by step. That is what the Eurogroup agreed to this evening. We agreed a plan for action. What we saw here this evening after a huge amount of work is an example of how Europe works. I am privileged to occupy a role for Europe, and I made the case for broader, big collective steps. But what the Eurogroup has done today is to agree to a step that will be a clear and strong improvement ahead of where we are today. That's the way our economic union works and it is the way we will make more progress on Banking Union. This evening we agreed that we will strengthen the common framework for bank crisis management and also for the rules governing the use of national deposit guarantee funds. The Commission will bring forward a proposal with regard to that. The Eurogroup made a political commitment to turn that progress into reality. This is a sign of how step by step we will strengthen the Banking Union. We will make progress towards a complete Banking Union by doing it in different phases. We also had a discussion on the economic outlook. President Lagarde briefed us on the latest ECB macroeconomic projections and the related monetary policy decisions. Commissioner Gentiloni gave an update on the Commission thinking regarding where we stand and with the uncertainty that we acknowledge is there. What all members of the Eurogroup reaffirmed this evening was our commitment to taking the steps and policy decisions that are needed to ensure the resilience of the euro area, and our confidence that we will maintain that resilience. If we look at the progress with the implementation of the recovery plan, if we look at the levels of employment within the euro area, we believe these are very strong foundations for how the euro will navigate its way through changing economic conditions. Finally and briefly, we reviewed where we are with the post-programme surveillance reports with regard to Spain, Cyprus, Portugal and Ireland and the Eurogroup also adopted its work programme for the second half of the year. I also had the pleasure earlier today of chairing the annual meeting of the ESM Board of Governors. This was a symbolically important meeting for many reasons: the 10th anniversary of the operations of the ESM, it's the last meeting with Klaus Regling at the helm of this institution. I thank him for his enormous work. With my fellow governors I will soon return to the process to appoint his replacement. We made another step of progress towards that today, but we have more work to do. Press material Thursday 16 June 2022   ● Eurogroup   16/06/2022 19:47 | Press release | Eurogroup statement on the future of the Banking Union of 16 June 2022   Today, the Eurogroup in inclusive format issued a statement on the future of the Banking Union. The creation of the Banking Union in 2014 was a powerful response to the financial crisis, with significant progress on an EU single rulebook, on the establishment of a new European architecture for supervision and resolution, and on reducing risks. This has contributed to making Europe’s banks more robust and businesses, investors and citizens more confident in the European financial system. During the pandemic crisis, the European banking sector has been a source of stability rather than weakness. Yet, the Banking Union remains incomplete. Further progress is needed to allow the banking sector to fully contribute to Europe’s economic resilience and sustainability. A robust and competitive EU banking sector, together with strong capital markets, will be key to mobilising the investments needed for the green and digital transformation and the energy transition. A reinforced Banking Union will foster trust and strengthen financial stability – necessary conditions for growth and reforms. In December 2021, the Leaders reiterated the mandate to the Eurogroup in inclusive format to agree on a work plan charting the way towards the completion of the Banking Union. The Eurogroup in inclusive format has explored ways to strengthen the framework for the management of failing banks in the EU, create a more robust common protection for depositors, facilitate a more integrated single market for banking services, and encourage greater diversification of banks’ sovereign bond holdings in the EU. Today, we have agreed that, as an immediate step, work on the Banking Union should focus on strengthening the common framework for bank crisis management and national deposit guarantee schemes (CMDI framework). Subsequently, we will review the state of the Banking Union and identify in a consensual manner possible further measures with regard to the other outstanding elements to strengthen and complete the Banking Union. A consistent and effective framework for managing banks in distress is a critical part of the Banking Union. Its role is to ensure financial stability, create a level playing field, and protect depositors and taxpayers through consistent burden sharing and through the industry-funded safety nets. The EU framework has been significantly reinforced over the last decade. Yet, there remains room for improvement and harmonisation to build a crisis management framework suited for all types of banks, including for small and medium-sized banks. Drawing on the experience of the last decade, the Eurogroup in inclusive format agrees on the following broad elements to underpin a strengthened CMDI framework: A clarified and harmonised public interest assessment. Broadened application of resolution tools in crisis management at European and national level, including for smaller and medium-sized banks, where the funding needed for effective use of resolution tools is available, notably through MREL and industry-funded safety nets. Further harmonisation of the use of national deposit guarantee funds in crisis management, while ensuring appropriate flexibility for facilitating market exit of failing banks in a manner that preserves the value of the bank’s assets. A harmonised least-cost test, administered by national authorities, to govern the use of DGS funds outside payout to covered depositors, to ensure consistent, credible and predictable outcomes. Harmonisation of targeted features of national bank insolvency laws to ensure consistency with the principles of the European CMDI framework. While maintaining a level playing field, the improved CMDI framework will take due account of the specificities in the national banking sectors, including by preserving a functioning framework for institutional protection schemes to implement preventive measures. The Eurogroup in inclusive format invites the European Commission, in full respect of its powers under the Treaties, to consider bringing forward legislative proposals for a reformed CMDI framework. We invite the co-legislators to complete any legislative work during this institutional cycle until early-2024. We take note of the intention of the European Commission to finalise the review of the State aid framework for banks to ensure consistency between the State aid framework and the renewed CMDI framework. We also remain committed to making progress as a matter of priority on the capital markets union. The capital markets union complements the Banking Union and will be an indispensable component in providing a larger and more diversified pool of resources to support our economies and foster the single market in financial services. Both initiatives would also enhance the international role of the euro and strengthen Europe’s resilience and open strategic autonomy. Banking Union (background information) International role of the euro (background information) Capital markets union (background information)