At today’s (Monday) Eurogroup meeting*, which was chaired by President of the Eurogroup and Irish Minister for Finance, Paschal Donohoe T.D., euro area Finance Ministers agreed on the need for a supportive budgetary stance to be continued across 2021 and 2022 to ensure the path to recovery is paved for Eurogroup members saying: ‘We are united in our approach that until the health crisis is over and recovery is firmly underway, we will continue to protect our economy through the deployment of the necessary level of fiscal support’.
Ireland’s supports, such as the Employment Wage Subsidy Scheme (EWSS), the Covid Restriction Support Scheme (CRSS) and the Pandemic Unemployment Payment (PUP) are replicated across the European Union. In 2020, Eurogroup Finance Ministers provided economic supports estimated at 8% of euro area GDP, on top of liquidity schemes of 19% of euro area GDP. These supports are enabled by a temporary relaxation of the fiscal rules.
The Recovery and Resilience Facility and the new safety nets put in place have provided additional support and confidence in European economies. National and EU supports continue to protect jobs and livelihoods. Millions of jobs in European firms were saved by these interventions.
The vaccine rollout offers hope, but there is still a significant amount of uncertainty about the shape of economic recovery. Ireland is at the forefront of decisions that shape the European economic response to COVID-19 while Minister Donohoe holds the Eurogroup Presidency and chairs the Eurogroup meetings. Across the euro area, Finance Ministers have now committed to measures which ‘should be adapted to the pace and strength of the recovery in each Member State and underpinned by a continuing commitment to fiscal sustainability’. The Eurogroup has also planned for a ‘gradual shift towards more targeted actions to promote a resilient and sustainable recovery’ for those sectors most in need.
President of the Eurogroup and Minister for Finance Paschal Donohoe welcomed the agreement today, saying: ‘Beyond sharing a currency, euro area economies share strengths and dependencies, and a determination to act together in times of difficulty. Our actions so far have cushioned the impact of COVID-19. With the rollout of vaccines, we have light at the end of the tunnel but uncertainty levels remain elevated and our policy response needs to remain supportive and agile. Today’s agreement demonstrates that we remain united in our approach and will continue to support European jobs, businesses and citizens in this acute phase of the health crisis’.
In inclusive format, with all 27 Finance Ministers, the Eurogroup prepared for the Euro Summit on 26th March, where Heads of State and Government will discuss the international role of the euro. The attractiveness of the euro on the global stage will be enhanced by many elements of the Eurogroup’s ongoing work, such as the need for sound and sustainable economic policies, completing banking union, ensuring financial market infrastructure and payment systems are resilient and keep pace with digital developments, and the ongoing EU bond issuances under Next Generation EU.
*Full Eurogroup statement issued this evening here: https://europa.eu/!Qy68TP
ENDS
Note to Editor: Minister Donohoe was elected President of the Eurogroup in July 2020. Further information on the Eurogroup Work programme can be found at:
https://www.consilium.europa.eu/en/council-eu/eurogroup/president/