Sunday

25th Aug 2019

EU finance ministers agree eurozone reforms, fall short of French ambitions

  • Ministers celebrate the euro's 20th 'birthday', with Eurogroup president Mario Centeno (r) and European Central Bank governor Mario Draghi (l) holding mock-up coins (Photo: Council of the European Union)

EU finance ministers on Tuesday morning (4 December) agreed on reforms to bolster the euro area's preparedness to tackle any future financial crisis - after talks that lasted all night in Brussels.

The deal, however, fell short of the ambitions of French president Emmanuel Macron - whose idea for a special eurozone budget received support, but not for the so-called "stabilisation" plan to help economies in unexpected trouble.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

The new budget would serve to boost competitiveness, linking it to economic reforms.

"Technical needs to work continue," finance commissioner Pierre Moscovici said of the eurozone budget's stabilisation element in the early hours of Tuesday after 18-hours of negotiations.

French finance minister Bruno Le Maire clashed with his Dutch colleague, Wopke Hoekstra, over the stabilisation function of a future eurozone budget.

The final agreement merely said that "possible features of a stabilisation function were also discussed, including the unemployment insurance scheme" for the eurozone budget.

"All in all, the way forward to a eurozone budget is opened, not fully-paved, but it is opened," Moscovici, a Frenchman himself, said.

The size of a future eurozone budget would be determined by EU leaders as part of their discussion on the EU's next long-term budget.

Completing the banking union, a result of fighting the euro crisis, has also proven to be difficult - with Germany opposing the launch of a European guarantee for bank deposits.

Critics see that guarantee as a way for southern member states to benefit from risk-averse Nordic EU countries. Ministers will come back to this issue next June.

But finance ministers managed to agree on expanding the effectiveness of the European Stability Mechanism (ESM) to help eurozone countries mired in large debts, but with the conditionality of EU countries reducing their pile of debts.

The backstop will be introduced earlier, provided that sufficient progress has been made in risk reduction - to be assessed in 2020, ministers said in a statement.

Ministers also agreed that the ESM would serve as a last resort in case of a major crisis for Europe's biggest banks.

All of the agreements reached by ministers are conditional on a nod from EU leaders gathering in Brussels next week for their summit.

Finance ministers have spent the last year coming up with reform proposals and deals on how to reinforce the stability of the eurozone in preparation for any future economic shock.

"These were very hard negotiations, the result is a breakthrough on some key issues," eurogroup president Mario Centeno told journalists after the meeting.

Opinion

Challenges for new Franco-German eurozone plan

With both Macron and Merkel losing support domestically, it is questionable whether their plans will succeed. Even more so, given the opposition by the Hanseatic states, the upcoming European elections and Italy's political hooliganism.

Exclusive

Brexit row delays financial products transparency review

A European financial regulatory body set up after the financial crisis is at loggerheads with the European Commission over whether to carry out a transparency review of certain financial products. The reason: Brexit.

Opinion

What is fate of non-euro EU states after Brexit?

The UK's withdrawal from the EU will heighten fears of marginalisation among the eight member states - Bulgaria, Denmark, Croatia, Poland, Romania, Sweden, Czech Republic and Hungary - that have not adopted the euro.

Commission defends Mercosur trade deal

EU commissioners defended a far-reaching free trade agreement between the EU and four Latin American countries, against critics who fear it will damage European farmers' livelihoods and the global environment.

News in Brief

  1. Ocean Viking to disembark in Malta after ordeal
  2. Germany joins France in world outcry on Brazil fires
  3. British people lose faith in Brexit deal
  4. Brexit hardliners want further changes to EU deal
  5. German manufacturers confirm fear of recession
  6. Belgian socialists and liberals scrap over EU post
  7. Fall in EU migration leading to UK skills shortages
  8. Switzerland makes post-Brexit flight preparations

Opinion

Why von der Leyen must put rights at core of business

Ursula von der Leyen's in-tray must include those European executives on trial for systematic workplace harassment, the break-up of European slavery rings, and allegations of European companies' abuse in palm oil, including child labour, land grabs, and deforestation.

Stakeholders' Highlights

  1. UNESDAUNESDA reduces added sugars 11.9% between 2015-2017
  2. International Partnership for Human RightsEU-Uzbekistan Human Rights Dialogue: EU to raise key fundamental rights issues
  3. Nordic Council of MinistersNo evidence that social media are harmful to young people
  4. Nordic Council of MinistersCanada to host the joint Nordic cultural initiative 2021
  5. Vote for the EU Sutainable Energy AwardsCast your vote for your favourite EUSEW Award finalist. You choose the winner of 2019 Citizen’s Award.
  6. Nordic Council of MinistersEducation gets refugees into work
  7. Counter BalanceSign the petition to help reform the EU’s Bank
  8. UNICEFChild rights organisations encourage candidates for EU elections to become Child Rights Champions
  9. UNESDAUNESDA Outlines 2019-2024 Aspirations: Sustainability, Responsibility, Competitiveness
  10. Counter BalanceRecord citizens’ input to EU bank’s consultation calls on EIB to abandon fossil fuels
  11. International Partnership for Human RightsAnnual EU-Turkmenistan Human Rights Dialogue takes place in Ashgabat
  12. Nordic Council of MinistersNew campaign: spot, capture and share Traces of North

Latest News

  1. Spain heading for yet another general election
  2. EU to discuss Brazil beef ban over Amazon fires
  3. 'Our house is burning,' Macron says on Amazon fires
  4. What happens when trafficking survivors get home
  5. EU states and Russia clash on truth of WW2 pact
  6. EU considers new rules on facial recognition
  7. EU to pledge Africa security funds at G7 summit
  8. Letter from the EESC on per diem article

Join EUobserver

Support quality EU news

Join us