A proposal that a small number of EU countries push ahead by themselves on stalled European financial reforms should act as a “catalyst” to jolt others to find agreement on the contested changes, Minister for Public Expenditure Paschal Donohoe has said.
A Eurogroup meeting of finance ministers from euro zone countries on Monday discussed plans to reform how capital funding moves across national borders within the EU. The long debated changes would make it easier for people to invest their savings and it is hoped as a result unlock billions of euros that could be invested in European companies.
During the meeting Spain tabled a proposal that would see a smaller group of countries be allowed to push ahead with some elements of the reforms, without the rest of the EU.
Speaking on his way into the meeting in Luxembourg, Carlos Cuerpo, the Spanish economy minister, said the proposal would be in cases of “last resort”, when talks for EU-wide reforms had not gone anywhere. It would allow a smaller group of at least three member states to agree to closer integration, he said.
Speaking in his role as president of the Eurogroup afterwards, Mr Donohoe said his “strong preference” would be for all countries to move forward together when it came to capital market reform.
Mr Donohoe said some countries wanting to push ahead themselves should act as a “catalyst” for others, prompting them to find a way to move the long stalled changes on. “My preference is for action to be taken across the entire Eurogroup, or even the entire European Union,” he said.
There has been renewed focus on the Capital Markets Union proposal in recent months, after years of delay. The reforms have been bogged down in the EU policymaking machine, in part due to concerns from some smaller countries that they would lose out. The fear is the change could lead one or several capitals, like Paris, becoming dominant hubs for capital, at the expense of others. The Government is also concerned that Ireland could run into difficulty with plans to better match up national insolvency regimes.
Speaking earlier, Minister for Finance Jack Chambers, who represented Ireland at the meeting, said there was a “huge need” for reforms that freed up the movement of private capital across the EU.
The meeting also discussed plans to make Europe more competitive economically, in light of a recent report by Mario Draghi, the former head of the European Central Bank. The report, which was drawn up for European Commission president Ursula von der Leyen, said the EU needed to find ways to make up an €800 billion a year shortfall to invest in its economy and big spending plans, if it wanted to keep pace with the US and China.
EU commissioner for the economy Paolo Gentiloni said the Draghi report should be the economic “blueprint” for Dr von der Leyen’s second five-year term at the top of the EU’s executive arm. Mr Gentiloni said he was concerned some countries were taking an “a la carte” approach and only picking out aspects of the report they liked, while avoiding “real decisions” that needed to be taken.
French economy minister Antoine Armand said the EU needed to come up with “concrete proposals” to increase the bloc’s economic competitiveness. France was keen to take the “next steps” pushing forward with the capital market reforms, he said.
Dutch minister for finance Eelco Heinen said the EU did not need “more debt” and indicated the Netherlands would not support common borrowing by the union to make up any shortfall on future spending.
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