The President of the Eurogroup, Paschal Donohoe, has sent a letter to the President of the Euro Summit, Charles Michel, reporting on ongoing and future work of the Eurogroup. The letter will inform the discussion that leaders will hold at the Euro Summit of 27 October 2023.
The letter highlights the remarkable resilience of the euro area economy in an economic context which is increasingly more challenging. The overall resilience is supported by the strong labour market conditions and many good reforms implemented. It refers to the need for determined, gradual and realistic fiscal consolidation to strengthen fiscal sustainability and rebuild fiscal buffers, while continuing to implement structural reforms and safeguarding and increasing investment to deliver higher sustainable growth. In addition, it underlines the need for a swift agreement on the fiscal rules as essential for the credibility and the smooth functioning of the Economic and Monetary Union (EMU).
It reports in detail on the work the Eurogroup has been undertaking in the last months on what measures are necessary to take forward the Capital Markets Union and ensure that European capital markets can renew and enhance private sector investment, unlock funding for common challenges, and allow the EU to demonstrate leadership on green and digital transitions.
It refers to the political anchor the Eurogroup has provided to the digital euro project and the two important milestones this year – the Commission proposal setting out the legal framework and essential elements of the digital euro in June and the decision by the ECB Governing Council in October to move to the preparatory phase, which will involve further analysis on design and functionalities.
It also highlights the resilience of the banking sector despite turmoil in the global banking system this year and the need for the work to complete the Banking Union to continue, including concluding the negotiations on the Commission’s legislative package on the crisis management and deposit insurance framework within this institutional cycle as well as finalising the reform of the European Stability Mechanism (ESM).
