Minister Backes Welcomes EU Economic Governance Review Progress; Clarifications Still Needed

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 13 and Tuesday 14 March 2023.

The Eurogroup discussions focused on the macroeconomic outlook for the euro area, particularly inflation developments in the Member States. The ministers also had an exchange of views on the euro area-specific elements included in the 2024 fiscal policy guidelines, addressed by the European Commission to Member States for the preparation of national stability programmes.

In its guidelines, the Commission invited Member States to focus on strengthening the sustainability of public finances and to promote sustainable and inclusive growth through the latter’s gradual consolidation. The Eurogroup adopted a declaration on this subject, and the meeting concluded with an exchange of views on the main policy objectives of a digital euro.

At the ECOFIN Council, the 27 ministers reached an agreement on the conclusions on the reform of the EU's Economic Governance Review. These conclusions set out key principles to guide the European Commission in the preparation of its legislative proposals. Minister Backes commented: "These conclusions are the result of intense discussions over the last few weeks and demonstrate the Member States’ spirit of compromise. Although the text adopted today is a fair compromise, clarifications will be needed later. The European fiscal framework should take into account the specificities of Member States and continue to promote sound budgetary policies.”

This debate was followed by an exchange of views on international affairs in preparation for the International Monetary Fund (IMF) Spring Meetings in Washington in April 2023. The Swedish Presidency of the Council of the EU and the European Commission also briefed the ministers on the main results of the G20 meeting held from 22 to 25 February 2023 in Bengaluru, India.

On the second anniversary of the Recovery and Resilience Facility (RRF) implementation, the key instrument of the “NextGenerationEU” recovery plan, the ministers discussed the RRF’s contribution to the energy transition and energy independence of the EU.

The ministers also discussed the economic and financial consequences of Russian aggression against Ukraine. In this context, they learned of the conclusions of the reports published by the European Securities and Markets Authority (ESMA) and by the European Union Agency for the Cooperation of Energy Regulators (ACER) on the possible effects of the EU Market Correction Mechanism (MCM) on financial and energy markets and on the security of supply.

In the margins of the meetings, Minister Backes had a bilateral meeting with the new Cypriot Finance Minister, Makis Keravnos.