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Δευτέρα 7 Ιουλίου 2025

Council of the EU,EUROGROUP,update

 

 
● Eurogroup
 
07/07/2025 17:05 | Press release |

Paschal Donohoe confirmed for a third term as Eurogroup President

 

The Eurogroup has today elected by consensus, Paschal Donohoe, Minister for Finance of Ireland, as its President for a third term. His new term, lasting two and a half years, will commence on 13 July 2025.

“It has been a great honour and privilege to serve as President of the Eurogroup since 2020. I am very grateful to my fellow ministers for the trust they have placed in me to continue leading our important work for a third term.

As I promised to ministers in 2020, I have been - and will remain - a genuine and honest broker in our negotiations, ensuring that all voices and positions are taken into account.

In the face of significant geopolitical changes, the euro area has proven to be very resilient. It will be my task to further strengthen our common currency area and facilitate tangible progress on our key work streams during this next mandate - from budgetary coordination to the Capital Markets Union, and from the digital euro to the Banking Union.

 A stronger and more competitive euro area will reinforce the international role of the euro, further enhance our resilience and prosperity to the benefit of our citizens.”

— Paschal Donohoe, President of the Eurogroup

The President has been in office since 13 July 2020.

Background

The Eurogroup is an informal body created in 1997 in which the ministers from the euro area member states discuss matters relating to their countries' common responsibilities related to the euro. Its main task is to ensure close coordination of economic policies among the euro area member states. It also aims to promote conditions for stronger economic growth and is responsible for preparing the Euro Summit meetings and for their follow-up. It usually meets once a month, on the eve of the Economic and Financial Affairs Council meeting.

The first Eurogroup meeting took place on 4 June 1998 in Luxembourg. The first President of the Eurogroup was Jean-Claude Juncker. He was succeeded by Jeroen Dijsselbloem, Mário Centeno and Paschal Donohoe, who was elected President of the Eurogroup for the first time on 9 July 2020.

● Eurogroup
 
07/07/2025 16:13 | Press release |

Eurogroup statement on the fiscal stance for the euro area in 2026

 

The euro area economy remains resilient, despite multiple shocks in recent years. Based on the Commission Spring forecast, euro area GDP growth, expected to be moderate this year, should accelerate in 2026 on the back of solid gains in households’ real disposable income, notwithstanding the current trade tensions. While risks to the growth outlook remain tilted to the downside, amid exceptional uncertainty in a volatile and unpredictable environment, the labour market remains robust with record low unemployment. Investment is set to increase in most member states, supported by the Recovery and Resilience Facility and other EU funds. Following a steady disinflation process, headline inflation is now around the ECB’s 2% target, earlier than previously anticipated. It is largely expected to stabilize around this level with risks to the inflation outlook appearing balanced.

Public debt in the euro area stabilized at around 90% of GDP in 2024, with a slight increase projected in 2025 and 2026, after a significant decline between 2020 and 2023. The euro area public deficit is expected to slightly increase and remain above but close to 3% of GDP over the forecast horizon.

The euro area fiscal stance was contractionary in 2024 and is expected to turn broadly neutral in 2025, based on the Commission forecast. This appears appropriate in light of the more negative macroeconomic outlook and the reduced inflationary pressures. This is consistent with the need for fiscal prudence in member states particularly those with high debt.

Strengthening Europe's defence capabilities is amongst our top priorities, and we will reinforce our overall defence, security and readiness while continuing to preserve debt sustainability. We welcome the request for the activation of the national escape clause (NEC) for defence spending during the period 2025-2028 by eleven euro area member states at this stage. The NEC should be implemented in a prudent manner to facilitate the transition to a higher level of defence spending in the medium term. While the necessary increases in defence spending are expected to have an expansionary effect compared to the path outlined in the submitted medium-term plans, the magnitude for the euro area as a whole will depend on the concrete implementation and will only become clearer over time. Focusing defence spending on productive investment and innovation can support economic activity in Europe, improve the ability of our economies to absorb higher defence spending and thereby ensure best value for public money. Over the medium term we will also work on the gradual reprioritisation of national budgets to accommodate higher defence spending, while remaining focused on addressing other structural and social challenges.

Excluding increased defence spending, fiscal restraint remains appropriate, and we are committed to implementing our medium-term plans in line with the revised governance framework. We expect a broadly neutral fiscal stance in the euro area in 2026, which seems overall appropriate in the current economic environment. This is before considering the impact of Germany’s medium-term plan, which Germany intends to submit by end-July. The implementation of the net expenditure paths recommended by the Council, through the 2026 budgets, would ensure the differentiation of fiscal policies across euro area member states, further reflecting country-specific fiscal and economic challenges. We will strengthen our efforts to improve the effectiveness, quality and composition of public spending.

The Eurogroup will continue to closely monitor economic and fiscal developments and reinforce its policy coordination. We will review euro area budgetary policies in December, informed by the Commission opinions on the draft budgetary plans for 2026.