Donohoe: It is not a moment to undermine the scale of the challenge we face

The EC has started preparatory work to identify areas where convergence in insolvency rules would give tangible benefits

Photo: EU Paschal Donohoe.

The Eurogroup meeting held on Friday, focused on thematic discussion on insolvency frameworks and the euro as digital currency. In inclusive format finance ministers of EU27 held a discussion on the Banking Union. The President of the Eurogroup, Paschal Donohoe, provided information to the Eurogroup on the spring meetings of the World Bank Group and the International Monetary Fund that he attended.

The world obviously is still in the midst of this terrible pandemic, and this was the key focus of our IMF and WB meetings, Donohoe said adding that his takeaway, however, was one of optimism about the months ahead.

Optimism about our economic policies, including within Europe, to support our societies towards an economic recovery, as we recover our health, he underscored.

“Vaccination is accelerating, and we are already seeing encouraging signs coming through in some of our economic data due to our vaccination effort and beyond. Growth is forecast to accelerate sharply once the level of infections and the scope of containment measures are reduced.”

The Eurogroup President warned as well that “it is not a moment to undermine the scale of the challenge we face” as it is without precedent. He also stated that the EU response has been equally unprecedented in its speed and scale.

The Eurogroup continue to be united in tackling the economic and social effects of the pandemic, Donohoe pointed out noting  that the support the EU is making available to the economies is still increasing as show the recent announcements in Germany, Spain and Italy.

He said that the Commission is working hard to implement the common Recovery and Resilience Plan as swiftly as possible. “We need to continue to tailor our policy strategy to our challenges. That's why we will be coming back to a discussion on economic development in May,” he stressed.

On the task from the Euro Summit last December for the Eurogroup to prepare “a stepwise and time-bound work plan on all outstanding elements needed to complete the Banking Union”, EU Commissioner for Economy Paolo Gentiloni commented that this is difficult, but important work.

He stated that the Commission is strongly committed to agreeing on such a work plan. We very much believe that we should commit collectively to having concrete deliverables during this institutional mandate, the Commissioner said.

Commissioner Gentiloni also specified that the Commission has started preparatory work to identify areas where convergence in insolvency rules would give tangible benefits and could be useful without compromising national rules, especially where they work efficiently.

Cross-country differences in insolvency regimes lead to fragmentation of EU capital markets and this convergence is also important to avoid the build-up of non-performing loans in the coming months and for future crises, he also underscored.

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