As Minister for Finance, I attend the Economic and Financial Affairs Council of the European Union (ECOFIN) which is responsible for EU policy in areas including economic policy. I also attend meetings of the Eurogroup, where the Ministers of the euro area Member States discuss matters concerning their shared responsibilities related to the euro. The Eurogroup’s main task is to ensure close coordination of economic policies among the euro area member states and to promote conditions for stronger economic growth.
At both the ECOFIN and Eurogroup meetings, Ministers of the Member States work alongside the European Commission and the European Central Bank (ECB) to take stock of the latest economic situation in the EU and euro area, including on the risks to the European economy’s growth prospects.
The European Semester was initiated in response to the crisis in 2010. It provides a framework for coordination of economic policies across the European Union in which guidance is provided to Member States before they take policy decisions at national level. The guidance is provided in the context of the Stability and Growth Pact (SGP) and the Macroeconomic Imbalance Procedure (MIP). As part of the Semester process, the Commission makes country-specific recommendations to provide tailored policy guidance to each EU country on how to boost jobs and growth, while maintaining sound public finances. Following the economic crisis, budgetary surveillance was enhanced with the 'Six-Pack' and 'Two-Pack' regulations which seek to complement the European Semester through enhanced monitoring and surveillance of the fiscal policies of EU Member States.
Following exceptionally strong growth in both the EU and the euro area in 2017, the broad based expansion is continuing in 2018 albeit at a slower pace, given the weakening in foreign demand. The latest estimates from Eurostat, the statistical office of the European Union, show that the euro area economy increased by 1.7 per cent in Q3 2018 compared to a year earlier. Growth continues to be steady due to the strength of domestic consumption and investment.
However, the European Commission’s Autumn 2018 Economic Forecast highlights that downside risks have increased of late, and dominate the outlook. Uncertainties continue in relation to the UK’s exit from the EU, escalating trade conflicts, geopolitical tensions, and changing global financial conditions. These risks require policy action that my fellow Finance Ministers and I are committed to addressing. At a global level, we must safeguard the open, rules-based, global trading system which has been associated with strengthening macroeconomic stability and raising living standards throughout the world. In Europe, we continue to make progress on developing Economic and Monetary Union, in particular through working to complete Banking Union, to reduce uncertainty and enhance financial stability. In addition, national authorities must implement prudent fiscal policies to achieve sustainable and inclusive economic growth for all.