Monday

27th May 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.

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.

EU top court backs Canada trade deal in ruling

The European Court of Justice ruled on Tuesday that the EU-Canada free trade agreement, and its controversial dispute settlement mechanism, is in line with the bloc's rules.

News in Brief

  1. Russia-critical banker elected president of Lithuania
  2. Timmermans calls for 'progressive alliance'
  3. Catalonia's Puigdemont wins MEP seat
  4. Weber opens door to alliance with greens and liberals
  5. Tsipras calls snap Greek election after EP defeat
  6. Polish ruling party PiS takes lion's share of EU vote
  7. Romanian voters punish ruling PSD party
  8. First official EP projection: EPP remain top, Greens fourth

Feature

Romania enlists priests to promote euro switchover plan

Romania is due to join the single currency in 2024 - despite currently only meeting one of the four criteria. Now the government in Bucharest is enlisting an unlikely ally to promote the euro to the public: the clergy.

Trump and Kurz: not best friends, after all

The visit of Austrian chancellor Sebastian Kurz to the White House on Wednesday showed that the current rift in transatlantic relations is deepening by the day.

Stakeholders' Highlights

  1. Vote for the EU Sutainable Energy AwardsCast your vote for your favourite EUSEW Award finalist. You choose the winner of 2019 Citizen’s Award.
  2. Nordic Council of MinistersEducation gets refugees into work
  3. Counter BalanceSign the petition to help reform the EU’s Bank
  4. UNICEFChild rights organisations encourage candidates for EU elections to become Child Rights Champions
  5. UNESDAUNESDA Outlines 2019-2024 Aspirations: Sustainability, Responsibility, Competitiveness
  6. Counter BalanceRecord citizens’ input to EU bank’s consultation calls on EIB to abandon fossil fuels
  7. International Partnership for Human RightsAnnual EU-Turkmenistan Human Rights Dialogue takes place in Ashgabat
  8. Nordic Council of MinistersNew campaign: spot, capture and share Traces of North
  9. Nordic Council of MinistersLeading Nordic candidates go head-to-head in EU election debate
  10. Nordic Council of MinistersNew Secretary General: Nordic co-operation must benefit everybody
  11. Platform for Peace and JusticeMEP Kati Piri: “Our red line on Turkey has been crossed”
  12. UNICEF2018 deadliest year yet for children in Syria as war enters 9th year

Join EUobserver

Support quality EU news

Join us