Economic and Financial Affairs

In her State of the Union address on 15 September 2021, President of the European Commission Ursula von der Leyen outlined flagship initiatives which the Commission plans to undertake in the coming year. These include continuing vaccination efforts in Europe and speeding up vaccination globally, as well as strengthening pandemic preparedness; working with global partners to close the climate finance gap; leading the digital transformation that will create jobs and drive competitiveness, while ensuring technical excellence and security of supply; ensuring fairer working conditions and better healthcare, and creating more opportunities for Europe’s youth to benefit from the European social market economy; stepping up cooperation on security and defence, and deepening the EU’s partnership with its closest allies; and defending European values and freedoms, and protecting the rule of law. President von der Leyen noted that the EU is recovering rapidly from the economic crisis created by the pandemic, with 19 countries expected to be at pre-pandemic levels this year and the rest the following year. Moreover, growth in the euro area has outpaced that in both the US and China in the last quarter. At the same time, the President emphasised the need for caution. She highlighted the important role of NextGenerationEU as the driver of both short-term recovery and long-term prosperity, as well as the need to address structural issues in the economy and to invest in 5G, fibre and digital skills. President von der Leyen also announced that the Commission will relaunch the discussion on the Economic Governance Review in the coming weeks to build a consensus on the way forward well in time for 2023.

The director of the European Centre for Disease Control (ECDC), Andrea Ammon, updated the Eurogroup on the COVID-19 epidemiological situation. Ministers followed up with a discussion on the economic situation and exchanged views with the chair of the European Parliament's committee on economic and monetary affairs, Irene Tinagli. The Eurogroup also discussed the lessons learned from the uneven impact of COVID-19 across economic sectors and regions. Ministers focused on the implications of the pandemic in the medium-term in terms of policy actions necessary to avoid divergences. The discussion was supported by a note prepared by the European Commission on the issue of convergence in the euro area. Following their agreement in previous meetings to monitor solvency and restructuring needs, ministers also discussed the solvency situation in the corporate sector, as well as potential measures to facilitate corporate restructuring and economic adjustment in the euro area during the post-COVID recovery period. Lastly, the European Central Bank (ECB) briefed the Eurogroup on the decision of the ECB Governing Council of July 2021 to launch the investigation phase of the digital euro project.

The framework adopted on 7 September provides investors in these bonds with confidence that the funds mobilised will be allocated to green projects and that the Commission will report on their environmental impact. Now that the framework has been adopted, the Commission will soon proceed with the first green bond issuance in the month of October, subject to market conditions. As announced earlier this year, the Commission has also reviewed its plan for funding the recovery in 2021 and confirmed its intention to issue a total of around €80 billion in long-term bonds this year, to be topped up by tens of billions of euros in short-term EU-Bills. The Commission will be offering the EU-Bills exclusively via auctions, with its auctioning programme due to start on 15 September.

This represents an important milestone in Croatia's efforts to join the euro area. The MoU was signed by Executive Vice-President Valdis Dombrovskis, Commissioner Gentiloni, President of the Eurogroup Paschal Donohoe and Croatian National Bank Governor Boris Vujčić during a ceremony which followed the meeting of the Eurogroup which took place in Brdo, Slovenia. The MoU allows Croatia, with the assistance of the Commission and euro area Member States, to carry out all the necessary preparations ahead of and up to the actual minting of euro coins. These include, among others: the selection by Croatia of its euro coin national side designs according to national procedures; the acquisition and production of minting tools and coin test runs; and arrangements for the distribution of euro coins and the withdrawal of the Croatian kuna during the changeover.

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