Speech by Paschal Donohoe after the Eurogroup meeting of June 16, 2022

I want to start by wishing you all a happy Bloomsday. Today, 100 years ago, James Joyce’s great masterpiece Ulysses was published in Dublin. To mark this special day in European and Irish literature, I presented each member of the Eurogroup with a copy of Ulysses in their own language. I was encouraged by the number of colleagues who said they had read it or were planning to read it.

The theme of our Eurogroup meeting today was resilience. The steps we are taking to strengthen the resilience of the euro going forward and the Eurogroup’s commitment to maintaining the resilience and robustness of the euro area under all circumstances.

Today, we have taken a number of decisions which are very tangible demonstrations of our commitment to this resilience and our desire to deepen it further. We have recommended, as a Eurogroup, that Croatia becomes the 20th member of our Euro family – a very clear signal about the strength of the Eurozone and its growing membership.

We also paved the way for the exit of the Greek economy from enhanced surveillance. And we agreed today on a plan of very concrete actions which will further strengthen our banking union.

I will say a word about each of these decisions today, and I will start with the discussion concerning Croatia. This discussion started with the Eurogroup welcoming the convergence reports published by the Commission and the ECB regarding the fact that Croatia met the necessary criteria for its economy to join the euro. Based on the convergence reports presented to us, the Eurogroup has now recommended that Croatia adopt the euro from 1 January 2023. I look forward to this recommendation being formally adopted by the Ecofin Council tomorrow.

This is a well-deserved achievement for Croatia, and it is recognition by the Eurogroup and the institutions of the European Union of the commitment and extraordinary work of Prime Minister Plenković, Minister Marić and all our colleagues of the Government of Croatia fulfilling all the necessary steps to join our common currency.

It demonstrates that the euro, which this year celebrates its 20th anniversary as a physical currency, is a union that is growing and will become stronger as it grows. It is first and foremost a symbol of how we use our integration and interdependence as a source of strength. And the Eurogroup’s decision to welcome Croatia into this family and Croatia’s determination to join our group is a sign of this resilience.

Second, we had another sign of this resilience today when we discussed Greece’s progress in implementing its reforms and its macroeconomic outlook. The basis for this discussion was the 14th enhanced surveillance report presented by the Commission. We have seen the very impressive resilience of the Greek economy, even in the face of the shocks of a pandemic, forest fires, earthquakes, and now the energy and human consequences of a war.

Despite all these many challenges, we see a continued commitment to the implementation of reforms within the Greek economy by the Greek government. And we see very clear signs of the growing resilience of the Greek economy.

We therefore welcomed the assessment by our institutions that the necessary conditions are now in place to confirm the release of the 7th tranche of the contingent debt measures. These measures amount to 748 million euros, and you will find all the details of this decision in the statement I published earlier on this subject.

Given the progress made by Minister Staikouras, the Greek government and the Greek people, we today welcomed the intention of the European Commission not to extend the enhanced surveillance of the Greek economy after the end of the program expires. august.

This is a very important achievement by the Greek government, the Greek people and – combined with the earlier abolition of capital controls, combined with the full repayment of IMF loans – another clear signal of the return to normality for the Greek economy and the continued progress made in economic policy since 2010, and in particular under the current Greek government. This was recognized as a historic moment by the Eurogroup during the presentation of the progress made by Minister Staikouras.

And then finally, as a third sign of the resilience of our efforts, we reached agreement on a new step towards banking union. I argued in favor of completing the banking union. The statement issued by the Eurogroup this evening underlines the commitment to complete, at the right time, the banking union. You can’t complete a project if you don’t take every opportunity to strengthen it step by step. This is what the Eurogroup agreed on this evening.

We agreed on an action plan. What we have seen here tonight after a huge amount of work is an example of how Europe works. I am privileged to hold a role for Europe and have advocated for broader and more important collective action. But what the Eurogroup has done today is to agree on a step that will be a clear and strong improvement on where we are today. This is how our economic union works and this is how we will make further progress on the banking union.

This evening, we have agreed to strengthen the common framework for managing banking crises as well as the rules for using national deposit guarantee funds. The Commission will present a proposal in this regard. The Eurogroup is politically committed to making this progress a reality.

This is a sign that we will gradually strengthen the banking union. We will move towards a full banking union in different phases.

We also had a discussion on the economic outlook. President Lagarde updated us on the ECB’s latest macroeconomic projections and related monetary policy decisions. Commissioner Gentiloni took stock of the Commission’s reflection on our position and with the uncertainty that we acknowledge.

What all the members of the Eurogroup have reaffirmed tonight is our commitment to take the necessary measures and political decisions to ensure the resilience of the euro area, and our confidence in the maintenance of this resilience. If we look at the progress made in implementing the recovery plan, if we look at the employment levels within the euro zone, we believe that these are very solid bases for the way the euro will navigate through changing economic conditions.

Finally and briefly, we took stock of the post-programme surveillance reports for Spain, Cyprus, Portugal and Ireland and the Eurogroup also adopted its work program for the second semester.

I also had the pleasure earlier today of chairing the annual meeting of the Board of Governors of the ESM. It was a symbolically important meeting in more ways than one: 10th anniversary of the functioning of the ESM, it is the last meeting with Klaus Regling at the head of this institution. I thank him for his enormous work.

Together with my fellow governors, I will soon resume the process to appoint his replacement. We took another step towards that today, but we still have work to do.

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