Yuriko Backes, Luxembourg's Minister of Finance; Credit: MFIN

Luxembourg's Minister of Finance, Yuriko Backes, participated in the meetings of the Eurogroup and the Economic and Financial Affairs Council (ECOFIN) in Brussels on Monday 16 and Tuesday 17 January 2023.

For the first time, the Eurogroup officially brought together the 20 finance ministers of the eurozone, following the accession of Croatia at the beginning of 2023. The ministers took stock of the transition from the Croatian kuna to the euro.

The finance ministers then discussed the digital euro project before adopting a joint declaration containing a series of principles for the possible future creation of such a currency. The Eurogroup also exchanged views on the economic, budgetary and financial situation in the euro area. A presentation by the staff of the International Monetary Fund (IMF) of the results of its mission in the euro area under Article IV complemented this debate. The finance ministers also continued their exercise of coordinating national measures to mitigate the impact of energy prices on households and businesses.

The meeting ended with an in-depth discussion on euro area-specific aspects of the reform of the European economic governance framework. On this subject, Minister Backes pointed out that "sustainable fiscal policy requires that action be taken before trajectories become unsustainable. Our approach must be forward-looking."

At the ECOFIN meeting on Tuesday, EU finance ministers met for the first time under the Swedish Presidency of the Council of the European Union. The latter presented its priorities for the next six months, particularly in the current economic context marked by uncertainty.

The 27 ministers then proceeded to their now usual exchange of views on the economic and financial consequences of the Russian invasion of Ukraine, after being briefed on the implementation of the instrument of support for Ukraine for 2023 ("Macro-Financial Assistance +"). The Council had previously adopted financial assistance of €18 billion to finance Ukraine's immediate needs and the rehabilitation of essential infrastructure for 2023.

The Council was also invited to endorse the first modification of one of the 27 national recovery and resilience plans. The allocation of European funds under the Recovery and Resilience Facility (RRF) was adjusted in June 2022 to better reflect the impact of the health crisis on growth in the different Member States. Having been the first to receive the green light from the European Commission, the amended Luxembourg recovery and resilience plan, amounting to €82.7 million, was also the first to be adopted by the Council. In this context, Minister Backes said: "Despite occasional adjustments to the plan, the initial ambitions remain fully preserved. I am delighted that the Council has given the green light."

In the context of the breakfast held ahead of the ECOFIN meeting, European finance ministers discussed the EU's response to the United States Inflation Reduction Act.

Minister Backes also took advantage of her trip to Brussels to meet the new Irish and Latvian finance ministers, Michael McGrath and Arvils Ašeradens, respectively.