News item | 18-05-2022 | 15:30
Finance Minister Sigrid Kaag and Eurogroup president Paschal Donohoe met in The Hague on Wednesday. They discussed the economic situation in the Netherlands, Ireland and the eurozone as a whole.
Their exchange focused in particular on the banking union and the future of European fiscal rules, as enshrined in the Stability and Growth Pact (SGP). The appointment of a new director of the European Stability Mechanism (ESM) was also on the agenda.
The Netherlands has nominated former State Secretary for Finance and former administrator at the IMF Menno Snel for this position.
European game rules
In October 2021, the European Commission launched a consultation on the future of fiscal rules. The finance ministers have made an active effort through the Eurogroup and Ecofin to coordinate policy across the euro area. The Dutch cabinet recently informed the House of Representatives about how the SGP can be reformed in the Netherlands’ opinion. ‘The Netherlands wants to look constructively at how the SGP can be improved. We are ambitious and want to work together for the future of Europe’, said Minister Kaag.
Eurogroup president Donohoe welcomed the Netherlands’ commitment to a broad search for a compromise acceptable to all: “An effective economic governance framework, based on national ownership, simplification and enforcement, will improve budget coordination in the eurozone at a time when it is really needed.” . I am strengthened by the efforts of Minister Kaag to look for constructive solutions that strike the right balance between stimulating growth-friendly investments and guaranteeing fiscal sustainability.’
banking union
Completion of the banking union has been a European goal for some time since this major project was launched more than a decade ago in response to the financial crisis. In early May, based on a mandate from EU leaders, the Eurogroup president presented a proposal for a work plan for all unresolved elements needed for completion.
The Eurogroup president said: “If we agree on a work plan for the banking union, our banking system will have a positive, forward-looking focus. It will ensure that our banking system is supported by a common safety net, is agile and competitive on the global stage, protects taxpayers and savers and supports Europe’s strategic autonomy.’
The Netherlands is positive about the Eurogroup president’s efforts to quickly arrive at a new work plan for completing the banking union. Minister Kaag: ‘There is still a lot to do and Paschal is working hard on this. A strong banking union is crucial for the Netherlands and Europe. It makes banks financially healthier, so that savers and society as a whole run fewer financial risks.’
European Stability Mechanism
Monday, May 23, finance ministers will meet in the Eurogroup to discuss who will be the new ESM general manager to succeed Klaus Regling, who will retire from October. There are four candidates from Italy, Luxembourg, Portugal and the Netherlands. The Netherlands has put Menno Snel forward. “We think he is an extremely good candidate with a good understanding of policy details,” says Kaag. ‘He is an economist who can build bridges and combine expertise and experience.’