Eurogroup: remarks by Jeroen Dijsselbloem

Remarks by Jeroen Dijsselbloem following the Eurogroup meeting of 9 October 2017

“Let me start by saying that today was Wolfgang Schäuble‘s last Eurogroup. A number of colleagues took the floor to thank him and bring back to memory his long involvement. He was in the Eurogroup for 8 years, but he has been a very strong participant in discussions about Europe for, I would almost say 45 years – I believe he has been in domestic politics for 45 years. He was there and actively involved at the start of the euro and the monetary union.

He was, as I said, member of the Eurogroup for 8 years, therefore present and very actively involved during all those crisis years in which the Eurozone almost fell apart. Some have said that Wolfgang Schäuble is dominant because Germany is dominant. Germany is a large country, but I think that is completely misunderstanding his position and the authority that he has among us, the colleagues. This has to do with his experience, but also his wisdom and his strong focus on the European interest. I’ve always been convinced, even in the toughest discussions that we had in the Eurogroup in the five years that I was involved, that he always put the long term interest of a strong and stable Eurozone first. He always kept a very strong view of that long term interest. And I think that has been mutually valuable for all of us.

So we thanked him, professionally and personally, and wished him well in his new and very important job in Berlin. Of course, we will immediately meet him again tomorrow at Ecofin, but it was his last Eurogroup. And then Washington, where he will also join us at the IMF/World Bank meetings.

Our main discussion today was on the role of the ESM. A discussion that, of course, takes place in the broader context of the future of the monetary union. Next month, we will continue that debate when we will focus on the completion of the banking union and on a number of fiscal issues, both the present fiscal framework – is it effective? how should it be changed, if it should be changed? – but also what possible new instruments we would need in terms of fiscal policy. So those are the topics for next month.

Today, we focused on the role of the ESM, along, basically, 3 strands. First of all, the role of the ESM in crisis management: how it could be strengthened, deepened. Secondly, the role of the ESM in the completion of the banking union. And thirdly, issues of governance and relation with the EU legal framework.

It was a very good discussion. Among the member states, the ministers, there was quite a strong agreement on that we should work predominantly within the current legal framework, in the ESM treaty. It means that the current governance setup could, in general terms, work also for the future, not precluding future changes or integration, in the future, in the European institutional frameworks.

Secondly, there was a strong positive sense about the work that the ESM has done. The ESM has now existed for five years and has been very effective, both on the financing sides and in bringing in the money on both sides of the balance sheets so to speak. Number of colleagues have pointed out that the ESM has more instruments than it has so far used. We could look at that to see what future role, further role, could be envisaged, but also possible additional instruments. Also that should be further discussed. I think everyone agreed that the ESM has a very strong role to play, not just in crisis management but possibly also in the prevention of the future crises.

And, finally, there was quite a broad support in involving the ESM in providing a backstop to the single resolution fund. Of course, as you know, that’s part of the roadmap for the banking union which outline number of actions that need to take place. I think next month we will discuss that whole agenda, that whole roadmap, but there seems to be a strong support for the ESM in the role of a backstop.

So I was quite happy with that debate and we will continue it and complete it working towards the eurozone summit in December.

Also, today, we discussed the topic of the tax wedge on labour. As you may recall, since 2014, we’ve had this topic on our agenda, following it closely. The Commission is monitoring progress, we’ve developed common principles to guide the reforms of the tax wedge. The euro-area tax wedge on labour is still very high, also looking at OECD statistics. There are also some big differences between countries.

Today, three of our colleagues shared the progress they have made on this topic, in Austria and in Belgium. And the French minister talked about the progress made in the past, for example in the period that Pierre Moscovici was minister in France, and the plans that the current French government has for the future. So, lots of lessons to be learned, also on how to finance these tax reforms. We will come back to that already in December, when the Commission will also report, this is an annual exercise, on the progress being made throughout the eurozone on the topic of the tax burden on labour. We will come back to that in December and continue this push for reforms.

Finally, we had two recurring items on our agenda. One is the post-programme monitoring for Portugal, the second one was a short discussion on exchange rates developments.

We commended Portugal for the recent improvements in economic performance, while, of course, recalling the importance of maintaining the reform momentum and continuing on the road of fiscal consolidation.

On exchange rates we noted that the euro has strengthened in recent months but it is broadly in line with long term averages.

Finally, let me make a few remarks, because you will ask me anyway, about my position. The rumour is that we will have a new government in the Netherlands. The latest news is that it could be in office in the week of 23 October, so I would leave my job in that week. I have put to the colleagues in the Eurogroup today that it would be my intention to complete my mandate which runs until 13 January, of course, if the colleagues in the Eurogroup would support that. There was unanimous support for that, everyone was content with me staying on until mid-January.

Finally, I said a few words about the election process of a new chair of the Eurogroup. His or her mandate would start as of the Eurogroup of January, but the election should take place at the end of the Eurogroup meeting in December. Candidates can be put forward in the two weeks before the Eurogroup of December, so starting on 4 December. And then, hopefully, in the January Eurogroup there will be a new chair.”

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