President Donohoe’s report to the President of the Euro Summit
The President of the Eurogroup, Paschal Donohoe, has sent a letter to the President of the Euro Summit, Charles Michel, to report on the work of the Eurogroup. The letter will inform the discussion that Leaders will hold at the Euro Summit on 25 March 2022.
The report takes stock of the economic situation and fiscal policy in light of recent developments, in particular Russia’s invasion of Ukraine.
Beyond the human tragedy unfolding in Ukraine, the Russian aggression is also clearly a challenge to our common prosperity, values and security, but it is one that we can overcome. The key contribution of the Eurogroup to this wider struggle is to work together to safeguard the recovery. A strong euro area economy is also an anchor for stability and security on our continent.
Paschal Donohoe, President of the Eurogroup and Minister of finance of Ireland
The letter highlights the resilience of the euro area in the face of the COVID-19 pandemic. It is clear that the war in Ukraine is now denting growth momentum and exacerbating inflationary pressures, due in particular to energy supply and energy prices, and finance ministers are looking at ways to shield vulnerable groups from these impacts.
At its March meeting, the Eurogroup adopted a statement recalling its strong coordination of fiscal policy in the euro area to weather the heightened risks and uncertainties. The Eurogroup agreed that transitioning from an aggregate supportive fiscal stance to a broadly neutral stance next year appears to be appropriate. At the same time, the Eurogroup recognises the need for differentiation of fiscal strategies across member states and it stands ready to react to the evolving economic situation through agile and flexible policies.
The report also takes stock of progress achieved by the Eurogroup on key issues relevant for the Economic Monetary Union, including:
- economic governance framework
- banking union
- digital euro