Eurogroup meeting in regular format of 19 eurozone countries
National automatic stabilisers
The Eurogroup held a thematic discussion on the role of national automatic stabilisers. Ministers exchanged views on how national policies could enhance the automatic stabilisers and shared their national experiences in this area.
Well-functioning national automatic stabilisers, which include tax and benefit systems, are the first lines of defence when a country is experiencing an economic shock. They are particularly important for countries that belong to a monetary union, because they cannot rely on their own monetary and exchange rate policies to counteract shocks.
Ministers also discussed how national automatic stabilisers and fiscal buffers relate to the need for a possible common fiscal capacity for the euro area.
Preparation of international meetings including discussion of exchange rate developments
Ministers took stock of the recent exchange rate developments. This is a regular discussion within the Eurogroup in preparation for international meetings.
The next G20 and IMF meetings will take place in Bali, Indonesia, on 11-12 October and 12-14 October respectively.
Meeting of 27 member states
Reform of the European Stability Mechanism
The Eurogroup discussed the reform of the European Stability Mechanism (ESM), as mandated by the Euro Summit meeting in June this year. The Eurogroup is expected to agree ‘on a term sheet for the further development of the ESM by December 2018’.
The discussion focused on two aspects of the reform:
- a review of the ESM toolkit, in particular the effectiveness of precautionary instruments and their eligibility criteria
- the role of the ESM in crisis management and prevention
Ministers agreed to request further technical work, in particular on the effectiveness of the precautionary conditioned credit line and the related ex ante eligibility criteria.
They also agreed to continue the discussion on developing the ESM’s role in crisis management and prevention, focusing on the need to avoid possible overlap with the existing EU processes and the European Commission’s competences in this area.