Remarks by Kyriakos Pierrakakis following the Eurogroup meeting of 8 October 2026

 

Press material Thursday, 08 October 2026

● Eurogroup   08/10/2026 20:27 | Statements and remarks | Remarks by Kyriakos Pierrakakis following the Eurogroup meeting of 8 October 2026   Let me begin by mentioning a few facts about the broader picture. Europe is facing multiple challenges. Geopolitical instability is putting renewed pressure on energy prices, inflation is going up and sovereign bond markets are reacting. Borrowing costs have risen, and the fiscal challenges facing major European economies are drawing increasing attention from investors. Markets assess economies on the basis of their fundamentals. That is a normal part of how financial markets function. The euro area fundamentals are sound, and we have a reformed economic governance framework within which every member state of Europe is operating. Our responsibility is to maintain confidence through prudent fiscal policies, strong institutions, and coordinated action. Regarding the challenging energy situation, we face a challenging balancing act. We must protect citizens from high energy prices without sending the wrong fiscal signals. We must support economic activity without jeopardising stability. And we must finance the needs of the future while safeguarding our credibility. That credibility is what enables us to act effectively when circumstances demand it. The euro area has demonstrated its resilience through successive crises. We have stronger institutions, valuable experience and significant economic policy tools at our disposal. On this basis, we always act calmly, with consistency and with determination. It was in this spirit that we approached today's agenda. Let me begin by mentioning energy. Since the end of August, energy prices have returned to elevated levels, affecting products such as diesel and jet fuel. Developments in the Middle East and Russia's ongoing war against Ukraine highlight Europe's exposure to serious external energy risks. In our meeting in inclusive format, we examined the measures taken by member states to protect the most vulnerable and maintain the resilience of our economies. All of us reaffirmed the importance of adhering to the measures that are “triple T” - temporary, targeted and tailored. Protecting citizens is an immediate priority for all of us. But support measures must be designed to avoid placing a disproportionate burden on public finances. At the same time, Europe's energy policy cannot be dictated by one crisis after the other. We need long-term planning and investment to strengthen our energy autonomy. That means more clean energy, greater electrification, stronger grids and better interconnections. These infrastructures take time to build. That is precisely why decisions cannot wait. Energy security, competitiveness and the clean energy transition are interconnected priorities. Europe must make progress on all three. The second item to mention on our agenda was the effectiveness and efficiency of public finances. The Eurogroup discussed this issue back in 2016. But over the past ten years, circumstances have changed and they have changed quite dramatically. Let me quote some numbers here to demonstrate this. Back then, the public deficit in the European Union stood at 1.7% of GDP. In 2026, it is projected to reach 3.5%. The average yield on ten-year government bonds was 1.1%. Now it’s 4%. Defence spending is obviously increasing as part of a broader policy vis-a-vis which we need to further invest on defence from 1.3% of GDP to 2.4%. And the cost of energy, the cost of oil, or the cost of natural gas has obviously also increased since then. Public debt also remains high. And in certain member states, it's also increasing. Greater needs, higher borrowing costs and tighter fiscal space - that is the reality within which all of us need to operate. Recent developments in sovereign bond markets remind us that investors are becoming more sensitive to fiscal risks and are seeking greater compensation for uncertainty surrounding the credibility and pace of fiscal consolidation, particularly in countries facing more challenging fiscal positions. The answer cannot simply be more borrowing. Nor can it be across-the-board spending cuts that weaken essential public services. We must achieve more with the resources that we already have. We need to reassess spending priorities, improve the efficiency of our tax systems and strengthen our overall fiscal governance. Analysis shows that there is significant room for improvement. Greater efficiency is no substitute for fiscal consolidation. It is, however, an essential complement to it. Today's discussion confirmed our shared commitment to sound public finances. Later this year, the Eurogroup will assess member states' draft budgetary plans and the overall fiscal outlook for the euro area. We will also continue our dedicated discussions on public spending priorities, optimising tax revenues and fiscal governance. The third item on the agenda was the capital markets union. We conducted the second annual review of the 2024 statement, as part of the savings and investments union agenda. We focused on supplementary pensions, savings and investment accounts, pension tracking systems and equity investment accounts. There is progress and this progress is quite encouraging, I have to say. Retail investor participation is increasing, particularly in countries where it was previously lower. Most member states have taken steps to increase participation in supplementary pension schemes, through automatic enrolment or incentives. At the same time, new investment products are being developed, alongside greater cooperation between member states. But we need to move faster. Europe has substantial savings that are not being channeled into the real economy to the extent that they could be. It is not enough anymore to describe the investment gap. We must close it. We need deeper and more integrated capital markets, more choices for savers and better access to finance for European businesses. The measure of our success will not be how many initiatives we announce, but how much investment we can actually mobilise. That is why we will continue to promote national initiatives that complement common European action. We also discussed international economic developments ahead of next week's annual meetings of the International Monetary Fund and the World Bank in Bangkok. Our biannual discussion focused on exchange rates and global economic imbalances. Tomorrow, at ECOFIN, we will examine a broader range of issues. The appreciation of the euro over the previous year has largely reversed in recent months. Major surplus and deficit economies need more balanced growth models. The euro area has contributed to this global adjustment. But the effort cannot be one-sided. Major economies must shoulder their share of responsibility, as their economic and exchange rate policies also have consequences for us, also consequences for Europe. Finally, we launched the process of selecting a successor to Isabel Schnabel on the executive board of the European Central Bank. Ms Schnabel announced on 24 September that she would step down before the end of her term, leaving the ECB on 3 January 2027. The appointment is made by the European Council, acting upon a recommendation from the Council of the European Union and after consulting the ECB and the European Parliament. The selection of the candidate takes place at the Eurogroup. We have thus set 28 October as the deadline for submitting candidacies, so that we can consider the matter at our next meeting. Ladies and gentlemen, Europe has demonstrated that it can respond to even the most difficult of circumstances. Today, however, we cannot simply rely on what we have achieved in the past. We must prepare for what lies ahead. Europe has the power to shape its own future. We must have the courage and determination to use that power. That is our responsibility in the Eurogroup: to turn our common will into common European strength.   Visit the website ● Eurogroup   08/10/2026 20:36 | Meetings | Main results - Eurogroup, 8 October 2026   The Eurogroup discussed exchange rate developments, took stock of progress on the capital markets union and held a discussion on the effectiveness and efficiency of public finances. Ministers also discussed the implications of energy market developments for the euro area economy and launched the process for appointing a new member of the ECB executive board. Finally, they prepared for upcoming international meetings.   View meeting page