Eurogroup president in Lisbon
The President of Eurogroup – the EU Body which unites all of the finance minsters in the European Union – Pascal Donohoe made a whistle-stop visit to Lisbon on Tuesday where he met with Portugal’s minister of Finances, Fernando Medina.
At the meeting the two finance ministers (Paschal Donohoe is the minister of Finance of Ireland) had a discussion on the factors that had contributed to the development of the Portuguese economy which through the latest positive figures on growth and exports has enabled the government to support Portuguese families and companies.
Fernando Medina also discussed with the Eurogroup president key European issues, in particular the European banking union created in 2014 as a key component of the EU’s economic and monetary union that aims to ensure that banks are robust and able to withstand any future financial crises.
The union also ensures that non-viable banks are resolved without recourse to taxpayers’ money and with minimal impact on the real economy (this did not happen in Portugal in 2014 with the winding up of Banco Espírito Santo and the cash injections from the Resolution Fund into Novobanco), so that market fragmentation is reduced by harmonised financial sector rules.
All Euro area member states are part of the banking union, Croatia and Bulgaria being the latest countries to join on 1 October 2020. Non-euro area EU member states can join the banking union by entering into close cooperation with the European Central Bank.
Also on the table was the reform of EU budget rules. The Commission is tabling legislative proposals to build an economic governance framework fit for the challenges ahead. The key objective of the reform is to strengthen debt sustainability and promote sustainable and inclusive growth through reforms and investment. To achieve this, the proposal will make the economic governance framework simpler and more transparent, improve national ownership and strengthen enforcement.