Chapter News

Video conference of economics and finance ministers, 10 July 2020

Main results

Economic impact of COVID-19 and recovery measures

Ministers exchanged views on the progress achieved on the implementation of measures to respond to the COVID-19 crisis at EU level. The European Commission and the European Central Bank (ECB) presented their assessment of the current situation.

We are at a crucial moment in our response to the economic consequences of the COVID-19 crisis. We are stepping up our efforts to make sure that companies, employees and member states can access the funds we agreed on earlier this spring. In parallel, crucial negotiations are also ongoing on the recovery plan. Ministers today reiterated their commitment to swiftly deliver on an effective response for a strong recovery.

Olaf Scholz, Germany’s Federal Minister of Finance and Vice Chancellor

Ministers took stock of the implementation of the three safety nets:

  • the ESM pandemic crisis support for member states: this instrument, based on an existing ESM precautionary credit line adjusted in light of the COVID-19 crisis, became operational on 15 May 2020.
  • the temporary support to mitigate unemployment risks in an emergency (SURE): this Commission-managed scheme can provide up to €100 billion of loans under favourable terms to member states and will become operational once all member states have provided their guarantees. This process is expected to be completed by the end of the month.
  • the EIB pan-European guarantee fund to support businesses: the €25 billion guarantee fund, which will mobilise investments across EU industries, will become operational as soon as member states accounting for at least 60% of EIB capital have provided their guarantees. The fund is expected to be finalised by the end of July.

Ministers also took stock of ongoing work on the EU’s recovery post COVID-19. Pending a decision by the European Council, work on the technical aspects of the recovery plan legislation continues.

Capital markets union

The Chair of the High Level Forum on the capital markets union (CMU), Thomas Wieser, presented the forum’s final report, published on 10 June. This report sets out 17 recommendations aimed at removing the biggest barriers in the EU’s capital markets and increase European capital markets’ competitiveness.

Ministers exchanged views on the priorities to bring the CMU forward, in particular with a view to overcoming the economic consequences of the COVID-19 crisis and to creating solid EU-based alternatives for capital markets after Brexit. This discussion will feed into the preparations of a new Commission CMU action plan, which is expected to be published by the end of the year.

Strengthening the Capital Markets Union will be among the top priorities of our Presidency in the economic field. Capital markets have a crucial role to play in the post-COVID recovery, to provide additional funding sources for our companies and to facilitate the green and digital transformations. Our goal is to agree a common approach in the Council on priorities for further strengthening this initiative by the end of the year.

Olaf Scholz, Germany’s Federal Minister of Finance and Vice Chancellor

Convergence reports

Ministers took stock of the convergence reports published by the European Commission and the ECB on 10 June. The reports examine whether non-euro member states satisfy the necessary conditions to adopt the single currency. They cover seven countries: Bulgaria, the Czech Republic, Croatia, Hungary, Poland, Romania and Sweden.

The reports are based on convergence criteria, including price stability, sound public finances, exchange rate stability and convergence in long-term interest rates. The compatibility of national legislation with Economic and Monetary Union rules is also assessed. The reports concluded that none of the countries meet all the formal conditions for joining the Euro area yet.

Information from the Presidency

The German Presidency outlined its priorities in the area of economic and financial affairs. It will focus on Europe’s comprehensive and ambitious response to the COVID-19 pandemic. It will also work on modernising the EU’s tax policy, strengthening the banking union, advancing the capital markets union, promoting a secure and innovative digitalisation of the financial services sector and combatting money laundering and terrorist financing. Sustainable finance also remains of central importance.

The Presidency also informed ministers about preparations of the upcoming G20 finance meeting and progress on ongoing international issues.

Compliments of the European Council.