On 13 January, Mário Centeno started his mandate as Eurogroup President, taking over from Jeroen Dijsselbloem who had served in the position since 2013. Euro area finance ministers elected Mr Centeno Eurogroup President on 4 December 2017, for a term of two and a half years. Mr Centeno is also finance minister of Portugal, a position to which he was appointed in 2015. To mark the handover of the Eurogroup Presidency and complete the transition of tasks, Mr Dijsselbloem and Mr Centeno had a working meeting during which they also discussed the Eurogroup agenda. On 8 January, Mr Centeno also had a meeting with Commission Vice-President Valdis Dombrovskis. The first Eurogroup meeting under the presidency of Mr Centeno will take place in Brussels on 22 January 2018.

“I am highly motivated to take on the helm of the Eurogroup. We have a unique window of opportunity to deepen monetary union, making our common currency more resilient against future crises.” 

In December, the Economic Sentiment Indicator (ESI) increased further, continuing the upward trend observable since autumn 2016. The indicator increased strongly by 1.4 points in the euro area (to 116.0), and by 1.6 points in the EU (to 115.9), reaching its highest levels since October (euro area) and August 2000 (EU). The more optimistic euro-area sentiment recorded in December was broad based, primarily boosted by marked increases in confidence in the services, retail trade and construction sectors. Confidence rose further in industry and among consumers as well. Amongst the largest euro-area economies, the ESI rose strongly in France (+2.3) and Germany (+1.6) and, to a lesser extent, in the Netherlands (+0.7), while it remained unchanged in Italy (0.0) and decreased slightly in Spain (-0.8). The marginally more optimistic outcome for the EU ESI (+1.6) resulted from a marked improvement of sentiment in the largest non-euro area EU economy, the UK (+3.6); also Poland (+1.2) recorded a plus. In line with the euro area, confidence improved strongly in services, construction, financial services and, to a lesser extent, in industry. 

Bulgaria’s EU Presidency has started with a EUR 100 million Juncker Plan loan for agri-pharma business Huvepharma to finance a boost in production levels and research and development in the area of animal health. The loan is guaranteed by the European Fund for Strategic Investments (EFSI), the central pillar of the Investment Plan for Europe, the Juncker Plan. On 9 January, the European Investment Bank (EIB) agreed to provide a loan of EUR 40 million to Indivumed GmbH, a physician-led, global oncology company, to support cancer research, while on 22 December 2017, the EIB Group provided two guarantees on a EUR 330 million portfolio of Austrian and German loans to SMEs and Mid-Caps, originated by Hypo Vorarlberg Bank AG. On the same day, a EUR 200 million loan for Acquedotto pugliese (AQP) was signed in order to support the 2017-2022 investment programme of the largest integrated water services operator in Southern Italy. Meanwhile, the EIB and Cramo – Europe’s leading Finnish rental group for construction machinery and equipment – signed a EUR 50 million loan agreement to further modernise and expand Cramo’s fleet, and on 21 December 2017, the EIB agreed to provide financing of EUR 25 million to AMW GmbH, a German pharmaceutical company specialised in the development and manufacture of innovative drug delivery systems. On the same day, the EIB signed five agreements making it possible to provide EUR 151 million for investment in innovation in several sectors of the Spanish economy, such as pharmaceuticals, transport and the automotive industry.

The Commission has welcomed the entry into force of new rules obliging Member States to give tax authorities access to data collected under anti-money laundering legislation. As of 1 January 2018, national tax authorities will have direct access to information on the beneficial owners of companies, trusts and other entities, as well as customer due diligence records of companies. The new arrangements should give a major boost to tax authorities in the fight against the types of structures highlighted in the 'Paradise Papers'. The new amended rules, enshrined in the Directive on Administrative Cooperation (Directive 2011/16/EU), will give tax authorities much-needed access and enable them to react quickly and efficiently to cases of tax evasion and avoidance. 

Euro area annual inflation was 1.4% in December 2017, down from 1.5% in November. In December 2016, the rate was 1.1%. EU annual inflation was 1.7% in December 2017, down from 1.8% in November. A year earlier the rate was 1.2%. These figures come from Eurostat, the EU statistical office. The lowest annual rates were registered in Cyprus (-0.4%), Ireland and Finland (both 0.5%) and Denmark (0.8%). The highest annual rates were recorded in Lithuania and Estonia (both 3.8%) and the United Kingdom (3.0%). Compared with November 2017, annual inflation fell in twenty-three Member States, remained stable in four and rose in one. The largest upward impacts to euro area annual inflation came from fuels for transport (+0.11 percentage points), tobacco (+0.06 pp) and milk, cheese & eggs (+0.05 pp), while telecommunications (-0.10 pp), garments and vegetables (-0.05 pp each) had the biggest downward impacts. 

Which fiscal policy instruments are most effective at reducing income equality?