Economic and Financial Affairs

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Despite mounting headwinds, the EUeconomy is projected to keep expanding over the forecast horizon, achieving a growth rate of 5%, 4.3% and 2.5% in 2021, 2022 and 2023 respectively. Growth rates for the euro area are projected to be identical to those for the EU in 2021 and 2022, and 2.4% in 2023. This outlook depends heavily on two factors: the evolution of the COVID-19 pandemic and the pace at which supply adjusts to the rapid turnaround in demand following the re-opening of the economy.

Ministers took stock of and exchanged views on energy prices and inflation developments within the euro area ahead of the Commission’s autumn forecast. The Eurogroup also discussed policy objectives and the uses of the digital euro in the context of the fast pace of digitalisation in the global economy, as well as its impact on the euro area and the common currency. Ministers took stock of related initiatives and developments at the international level. Paschal Donohoe, President of the Eurogroup, briefed ministers on the international meetings he attended in October (G7 and World Bank and IMF annual meetings). Meeting in inclusive format, ministers listened to a Commission presentation on the relaunched economic governance review, with a focus on the euro area dimension. They discussed the process through which Eurogroup (and Eurogroup in the inclusive format for relevant items) meetings will evaluate the governance review and held an initial discussion on how the Eurogroup could address challenges to the coordination of fiscal and economic policies within the euro area, as well as to the functioning of EMU in a post-COVID economic environment. The Eurogroup was briefed by the institutions on the main results of the bi-annual monitoring report on risk reduction indicators. Ministers also took stock of the preparations for the introduction of the common backstop to the Single Resolution Fund, as agreed in November 2020.

The way forward on economic governance will be discussed further until a broad consensus is reached. Ministers also discussed the current situation regarding the financing of Next Generation EU and the implementation of the Recovery and Resilience Facility. In addition, ministers approved conclusions on the future of the European Semester in relation to the Recovery and Resilience Facility. The conclusions call for the return of the essential elements of the European Semester in the 2022 cycle, in particular country reports and country-specific recommendations. The EU economy and finance ministers also discussed the recent steep increase in energy and consumer prices and their policy implications. After a presentation by the Commission, ministers debated a set of legislative proposals aimed at implementing the outstanding Basel III agreements. They received information from the Slovenian presidency on current financial services legislative proposals, and from the Slovenian presidency and the Commission on recent meetings of the IMF and G20 finance ministers and central bank governors. Lastly, the European Court of Auditors presented its annual report on the implementation of the EU budget for the 2020 financial year.

The disbursement is the second and last tranche of a €180 million support programme to Albania, which is part of the €3 billion emergency MFA package for ten enlargement and neighbourhood partners that aims to help them limit the economic fallout from the COVID-19 pandemic. The programme is a concrete demonstration of the EU's solidarity with its partners as it helps them to respond to the economic impact of the COVID-19 pandemic. The first €90 million disbursement to Albania under this MFA programme took place in March 2021. Albania has fulfilled the policy conditions agreed with the EU for the release of this second and final €90 million disbursement under the COVID-19 MFA programme. These included important measures to strengthen public finance and the resilience of the financial sector, improve governance and fight corruption, and enhance social protection. In addition, Albania continues to satisfy the pre-conditions for the granting of MFA as regards the respect of human rights and effective democratic mechanisms, including a multi-party parliamentary system and the rule of law. With this disbursement, the EU has completed eight out of the ten MFA programmes in the €3 billion COVID-19 MFA package and disbursed the first tranches to all partners.