EUROGROUP,update

 

Meetings Monday, 04 May 2026

● Eurogroup   04/05/2026 22:06 | Meetings | Main results - Eurogroup, 4 May 2026   The Eurogroup assessed the impact of the Middle East conflict on the EU economy and discussed policy measures to address the crisis. Separately, ministers heard from the Chairs of the Single Supervisory Mechanism and of the Single Resolution Board, with the discussion focusing on the operational resilience of banks in terms of cyber security and the use of artificial intelligence.   View meeting page ● Eurogroup   04/05/2026 22:00 | Press release | Remarks by Kyriakos Pierrakakis following the Eurogroup meeting of 4 May 2026   Expectations for a rapid normalisation of the crisis in the Middle East have not been confirmed. This is the difficult reality we are facing, and we must address it with realism and responsibility. Uncertainty remains. Developments are already affecting the European economy - energy prices, inflation and growth. Citizens feel the pressure in their daily lives, especially the most vulnerable amongst them. The same applies to businesses trying to operate in a highly demanding environment. Our responsibility towards them is to be prepared, even for the most difficult scenarios, such as a prolonged disruption in the Strait of Hormuz, which could further intensify pressure and slow down economic activity. We are addressing this issue as European governments in close coordination, including with our colleagues from outside the euro area, building on recent Eurogroup discussions, and we will continue to monitor it systematically. European coordination in such critical matters is an essential prerequisite. Despite the challenges, Europe has a strong starting point. The euro area has demonstrated its resilience, inflation was close to target before this latest shock and our labour market remains robust, with historically low unemployment. This is our foundation. And on this foundation we are building, with planning, consistency and responsibility. Member states have already taken measures to support citizens and businesses. We are acting in a coordinated manner, with a common denominator, as defined by the Commission: these measures must be targeted, temporary, in line with the fiscal rules we have agreed upon, and also consistent with the objectives of the green transition. In a context of successive crises, maintaining this balance is not easy, but it is absolutely necessary. In this direction, we had a particularly substantive discussion with Oya Celasun, Deputy Director of the European Department of the International Monetary Fund. The IMF recognises Europe’s positive starting point, but stresses that the effects of the crisis are not evenly distributed. Net energy importers and economies with limited fiscal space obviously face greater pressure. This obliges us to act with caution, with well-designed and with targeted policies. It was therefore very revealing to learn from the IMF that around 70% of the total cost of the measures we took in 2022 were either not targeted or distorted prices - or both. Worse still: when it comes to the current energy shock, in making the assessment, the IMF notes that 33% per cent of electricity subsidies have the potential, if the measures are untargeted, to go to the 20% richest of the population compared to 11% for the poorest 20%. This gap is even bigger when it comes to transport-fuel subsidies: 34% have the potential to go to the richest households and only 9% to the poorest - again, if the measures are untargeted. The IMF also reminded us that energy efficiency gains and a cleaner energy mix have made Europe more resilient. European households have gained 12% less costs thanks to greater efficiency and the shift toward renewables over the past five years. The EU and member states are decisively strengthening our strategy to become energy independent. In recent years, we have reduced our dependence on fossil fuels. However, current developments show that we must accelerate. We are investing in electricity interconnections, clean energy sources and European energy networks. In this context, the European Commission’s “AccelerateEU” plan is an important step forward. At the same time, the stability of our financial system remains critical. In the hearing with Claudia Buch, Chair of the Supervisory Board of the Single Supervisory Mechanism (SSM), and the update from Dominique Laboureix, Chair of the Single Resolution Board (SRB), it was confirmed that the European banking sector is resilient. However, there is no room for complacency. Banks must be prepared for an environment of heightened uncertainty and rapid technological change. It is for this reason that we decided to kick-off a discussion on AI at today’s meeting. Frontier AI models are evolving rapidly and may soon present challenges of a potentially systemic nature. And we must ensure a framework that supports both stability and competitiveness. We also extended our discussion to the issue of cross-border banking activity, with the contribution of Slawomir Krupa, President of the European Banking Federation. The consolidation of the European banking sector is a prerequisite for strength. It may lead to better allocation of capital and liquidity, stronger risk diversification and economies of scale. Scale that could spur banks in the EU to catch up with international peers in investments in new technologies. I believe that consolidation in the banking sector will translate into greater stability, greater competitiveness and more choices for citizens. This is an effort we will continue, including on the basis of the European Commission’s forthcoming report. The same logic of improved competitiveness and more citizens’ choice applies to the Capital Markets Union. In our discussion with Jörg Kukies, former German Finance Minister, and Christian Noyer, former Governor of the Banque de France, we examined the recommendations of their report on financing innovative enterprises. Better access to private capital, reforms to supplementary pension systems and the creation of a ‘28th regime’ for company law - all those are key conditions to strengthen growth and innovation in Europe. We will return to assess progress on these initiatives in October. The Eurogroup is also advancing work on digital finance. We took stock of the progress made at technical level in recent months and agreed on next steps, with a view to adopting a common European policy stance in July. Europe is operating in an environment of continuous and complex challenges. Our response must be coherent, steady and decisive: with responsible fiscal policy, accelerated energy transition, deeper financial integration and investment in innovation and the digital economy. The resilience that we managed to build is the foundation. The next step is to turn it into strength - into growth and competitiveness. For Europe and its citizens.   Visit the website