Yuriko Backes Highlights Need for Well-Coordinated Political Action at Eurogroup & Ecofin Meetings

On Monday 11 and Tuesday 12 July 2022, Luxembourg's Minister of Finance, Yuriko Backes, participated in the meetings of the Eurogroup and the Economic and Financial Affairs Council (ECOFIN) in Brussels.

At the start of the Eurogroup meeting on Monday, the nineteen finance ministers had an exchange of views on the International Monetary Fund's (IMF) assessment of the economic outlook for the eurozone. The ministers also discussed the "digital euro" project as well as the introduction of the euro in Croatia in 2023.

The Eurogroup looked at the budgetary situation within the eurozone in the context of the member states' preparation of their draft national budgets for the year 2023. On this occasion, the Eurogroup adopted a statement providing guidelines for budgetary policy. This statement calls on all euro area member states to pursue a prudent fiscal policy in 2023 that does not further stimulate demand in the current inflationary and rising interest rate environment. Member states should favour targeted and time-limited measures while continuing to invest in favour of the green and digital transition.

Luxembourg's Finance Minister, Yuriko Backes, commented: "Pricing pressures are a common concern for all eurozone member states and I see great determination among my colleagues to protect the most vulnerable households. Now is not the time to put a permanent burden on national budgets, but rather to restore confidence and anchor the sustainability of our public finances through coordinated political action within the euro area in a context of great uncertainty".

At the end of the Eurogroup, a meeting of the Board of Governors of the European Stability Mechanism (ESM) was convened to discuss the selection of the next ESM Managing Director, for which the Luxembourg's former Finance Minister, Pierre Gramegna, is a candidate. The ministers learned that the Italian candidate Marco Buti has withdrawn from the race and they will proceed to a vote for the two remaining candidates, namely Portugual's João Leão and Mr Gramegna. Despite the advantage in terms of votes for Pierre Gramegna, the majority of 80% required for the appointment of the Managing Director of the ESM was not reached, so the ministers will return to this matter at a later opportunity.

At the ECOFIN meeting on Tuesday, the European Union's (EU) 27 finance ministers were presented with the work programme of the incoming Czech presidency, which took office on 1 July 2022. Afterwards, ministers deliberated on the Council's future role and engagement in supporting Ukraine. Minister Backes welcomed the fact that discussions on financial support for Ukraine were continuing at ministerial level, in order to act in a coordinated way at EU level, and that the ECOFIN had on this occasion released a new €1 billion tranche in financial assistance for Ukraine.

The ministers also took stock of the progress made in the implementation of the Recovery and Resilience Facility and finally adopted the legal acts relating to the introduction of the euro in Croatia in 2023.

On the sidelines of these meetings, Minister Backes had bilateral meetings with her counterparts Gintarė Skaistė, Lithuania's Minister of Finance, Klemen Boštjančič, Slovenia's Minister of Finance, Zdravko Marić, Croatia's Minister of Finance, and Vincent Van Peteghem, Belgium's Minister of Finance. She also had an interview with Mairead McGuinness, European Commissioner for Financial Services, Financial Stability and Capital Markets Union.