The COVID-19 pandemic has caused an unprecedented economic shock, with high human costs and deep social repercussions. In response, the European Union and its member states have taken equally unprecedented steps to mitigate the impact of the crisis.

The Eurogroup was at the forefront of the early economic policy response and it will continue to play a key role in assisting citizens, businesses and member states to recover from the impacts of the pandemic. The Eurogroup in inclusive format agreed EUR 540bn worth of safety nets to assist member states address the immediate challenges faced.  These safety nets include the instrument for temporary support to mitigate unemployment risks in an emergency (SURE), the EIB pan-European Guarantee Fund, and the ESM Pandemic Crisis Support.

In July, the European Council agreed on a recovery instrument of historical significance to deal with the aftermath of the crisis. Next Generation EU will allow the Union to provide loans and grants to the member states to support their recovery efforts. The Eurogroup looks forward to working in an open and collaborative way with all parties to ensure the euro area emerges strongly from the crisis.

A strong European economy, with the euro at its heart, is essential for the recovery and the return to a sustainable growth path. Through its informal high-level discussions the Eurogroup will be a forum for inclusive deliberations, promoting common understanding on challenges and appropriate policies within the euro area and in cooperation with non-euro area member states in matters of common interest. It will work closely with the EU Institutions and the Council Presidency to achieve its policy priorities.  

The Eurogroup’s priority policy areas

The Eurogroup will continue to lead the euro area economy towards an inclusive recovery that benefits all citizens by focusing its work on a number of priority policy areas:

Economic and fiscal policies to support recovery and long-term growth. Implementing effective, sustainable policies in a concerted manner to stabilize the economy and support the recovery requires intense policy dialogue and co-ordination. Next Generation EU, including its emphasis on green and digital agendas, will be a key element in supporting member states’ recovery. The Eurogroup will play an important role in fostering consistency and coherence between national policies, the use of the new EU financing tools, and euro area priorities. Co-ordination within the Eurogroup will help to prioritise policy actions that facilitate economic recovery and promote the structural reforms and investments that increase the resilience and foster convergence within the Economic and Monetary Union and the EU as a whole. The Eurogroup will seek to align reform with the goals of a green transition and a digital future. 

The annual assessment of Draft Budgetary Plans will be the time to provide guidance on the overall fiscal stance of the euro area and the fiscal plans of the member states. At the same time, the review of the economic governance framework launched by the Commission will provide an opportunity to take a critical but constructive perspective on the effectiveness of this process and fiscal surveillance in general. Similarly, the euro area Recommendations will provide the conduit for the Eurogroup to formulate its policy views and to support a coherent policy mix across a broad range of economic and fiscal policies, which is all the more relevant in the context of the recovery.  The Eurogroup will continue to discuss policies that address longer-term challenges, such as higher and targeted investment in the green and digital transitions, and structural reforms to support growth potential, with a view to fostering mutual learning and spreading best practices. 

Finally, on a regular basis the Eurogroup will monitor macroeconomic and fiscal developments and hold discussions on reforms. 

Strengthening the Banking Union. The recent crisis has shown that a well-functioning financial sector and a resilient Banking Union are key to financing the recovery for households and businesses.  The Eurogroup has agreed that completing the Banking Union is a priority and it has recognized the necessity of taking Banking Union forward in a holistic manner and on a consensual basis.  In the coming months, Finance Ministers will focus on finalizing the agreement on the ESM Treaty as well as on the early introduction of the common backstop to the SRF on the basis of the forthcoming risk reduction assessment by the EU institutions. Ministers will also make progress with the issue of liquidity in resolution and as a matter of priority will look into some specific aspects of the crisis management framework.

 The objectives of Capital Markets Union to support the financing of the economy and to strengthen market-based adjustment mechanisms in the euro area merit consideration at Eurogroup given its increasing role in financing euro area economic activity without prejudice of the discussions taking place in the Ecofin Council. Capital Markets Union can complement Banking Union, as well as providing an alternative to bank-intermediated finance. It is also important for the deepening of the Economic and Monetary Union and deep and liquid capital markets are a prerequisite for an enhanced role of the euro.  In light of the impact of the current crisis, achieving these objectives is critical and will be fully supported by the Eurogroup.

The euro as a digital currency. New technologies in banking and payments are giving rise to new services and business models by established financial institutions and new market entrants. Analysis of digital currencies and of a potential digital euro is being undertaken by international institutions, governments and the private sector. Recent initiatives from the European Central Bank and the Commission highlight the scale of the challenge for the EU to find the appropriate balance between innovation and consumer protection, consolidating economic autonomy in the field of payments and a possible central bank digital currency. Although the detailed regulatory aspects of these changes are outside Eurogroup’s purview, the Eurogroup will carefully examine the ongoing impact these changes will have on euro area economies in order to safeguard financial stability and monetary sovereignty, while remaining at the forefront of innovation and supporting growth.

International role of the euro. The euro is an important international currency. The Eurogroup will continue to monitor carefully the potential opportunities and advantages but also the risks of an enhanced international role of the euro. Equally important, the Eurogroup will monitor the plans and actions related to the introduction of the euro in the member states with a derogation. It will offer its support and guidance on the appropriate policies leading to successful participation in the ERM II and the eventual introduction of the euro.

Particular importance will be given to strengthening the connection with European citizens and increasing their sense of ownership of the euro and of the Economic and Monetary Union. The Eurogroup is committed to transparency and strengthening the legitimacy of the euro and Economic and Monetary Union. In its deliberations it will pay attention to and clearly communicate the impact to citizens. As part of the work programme, the Eurogroup will take stock of the implementation of the transparency regime. 

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The new rules aim to help crowdfunding services to function smoothly in the internal market and to foster cross-border business funding in the EU, by providing for a single set of rules on crowdfunding services.

The uniform set of criteria will apply to all European Crowdfunding Service Providers (ECSP) up to offers of EUR 5 000 000 (from EUR 1 000 000 proposed by the Commission), calculated over a period of 12 months per project owner.

Protecting investors: clear information and transparency

Investors would be provided with a key investment information sheet (KIIS) drawn up by the project owner for each crowdfunding offer or at platform level. Crowdfunding service providers would need to give clients clear information about the financial risks and charges they may incur, including insolvency risks and project selection criteria.

Authorisation and supervision

A prospective ECSP would need to request authorisation from the national competent authority (NCA) of the member state in which they are established. Through a notification procedure in a member state, ECSP would also be able to provide their services cross-border. Supervision would also be carried out by national competition authorities, with the European Securities and Markets Authority (ESMA) facilitating and coordinating cooperation between member states.

Next steps

With no proposal to reject the Council’s positions and no amendments tabled, the text was deemed adopted. The rules will start to apply one year after its publication in the Official Journal of the EU.

Background

Crowdfunding is increasingly popular as an alternative financing tool for start-ups as well as for small and medium enterprises (SMEs) at an early stage of company growth. A crowdfunding service provider operates a digital platform open to the public to facilitate prospective investors or lenders to be matched with businesses that seek funding.

Vote: Monday, 5 October

Procedure: ordinary legislative procedures, second reading (with an agreement)

Today, the Eurogroup gave its support to the candidacy of Frank Elderson to become the new member of the European Central Bank’s Executive Board.

Frank Elderson is currently Executive Board Member of De Nederlandsche Bank, the Dutch central bank.  

The Council will adopt a recommendation putting forward the candidacy of Mr Elderson to the European Council, which is composed of the heads of state and government. Since ministers cannot meet due to the COVID-19 related restrictions, the recommendation will be adopted by written procedure. The European Council will then consult the European Parliament and the Governing Council of the ECB. It is expected to adopt its final decision by the end of the year.

The new member of the executive board will replace Yves Mersch, whose mandate ends on 14 December 2020, and who served a non-renewable 8-year term.

Background

Article 283(2) of the Treaty on the Functioning of the European Union specifies that appointments to the ECB Executive Board are made “by the European Council, acting by a qualified majority, from among persons of recognised standing and professional experience in monetary or banking matters, on a recommendation from the Council, after it has consulted the European Parliament and the Governing Council of the European Central Bank.”

The ECB executive board is responsible for the implementation of euro area monetary policy, as laid down by the ECB governing council. It is composed of the President, the Vice President and four other members, all appointed for a non-renewable 8-year term. The governing council is composed of six executive board members and the governors of national central banks of the euro area member states.

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The Georgian Parliament adopted on 30 September legislative amendments aimed at reviewing the selection process of Supreme Court judges. The European Union and other key observers had repeatedly expressed concerns over the shortcomings in this selection process.

It is regrettable that the Parliament did not await the publication of the urgent Venice Commission Opinion on this legislation, which it had itself requested, and which is expected in the coming days. This was a missed opportunity to create greater public trust in this process.

The European Union will assess the legislation and its implications, taking into account the upcoming Opinion of the Venice Commission, and expects that Georgia will further consider the rules of the selection process in light of the Venice Commission’s recommendations.

Upholding the highest standards of ethics and integrity in its judiciary is key for Georgia’s credibility in the eyes of its citizens and international partners, and for the advancement of the EU-Georgia partnership.

The EU supports the integration of Ukraine into the European Higher Education Area and major reforms in the country to restructure and modernise the education system in order to deliver globally-recognised, quality education, to enhance the relevance of the educational offer and expand its internationalisation. Ukraine participates actively in EU capacity-building and academic mobility schemes of Erasmus+, leading to international and intercultural experiences of students and staff, familiarisation with new learning and teaching methods, and strengthening of competences and networks.

The EU also supports key competences and skills of young people, their active citizenship, social inclusion and solidarity through specific actions in the field of youth. Ukraine takes an active role in Erasmus+ projects promoting youth exchanges and volunteering, cooperation, networking and peer-learning activities.

More than 9,000 Ukrainian and nearly 4,000 European students and academic staff have benefitted from Erasmus academic exchange opportunities. In addition, over 14,500 young people and youth workers from Ukraine have taken part in short-term exchanges, mobility, training and volunteering projects.

Since 2014, 272 Erasmus+ scholarships have been awarded to Master students from Ukraine to follow Erasmus Mundus Joint Degree programmes.

The EU has dedicated € 5 million as a specific bilateral window for Ukraine under Erasmus+ to increase the existing opportunities for student and academic mobility and traineeships, support to reform processes at higher education institutions and greater involvement of Ukraine in Jean Monnet activities in the years 2019 and 2020.

Professional, cultural and youth exchanges, artistic cooperation and Ukraine’s participation in EU programmes is supported through the “House of Europe” programme (€18 million). The EU is providing €53 million to support the modernisation of the vocational education and training system and secondary education, as well as displaced universities in eastern Ukraine. The EU is also providing €2 million for enhancing the instruction of the Ukrainian language as second language among the national minorities.