The ministers of Economy and Finance of the eurozone, the Eurogroup, reached an agreement on Thursday on the use of funds and the governance of the future budget for the area of the single currency, one more step towards its establishment despite the fact that fringes remain to close.
The president of the Eurogroup, Mário Centeno, announced the agreement with a message on the social network Twitter after midnight on Wednesday after more than six hours of negotiation, although it was expected that the talks, focused on agreeing on their financing, would continue throughout the morning.
The details, however, will only be announced in a press conference at 8.30 a.m. (6.30 GMT) on Thursday morning. The wording of the agreement text has not yet been finalized, according to European sources.
According to the French Finance Minister, Bruno Le Maire, also on Twitter, the use of resources and the mode of decision-making have been agreed, as well as the variation in the co-financing rate "depending on the economic situation."
This point, claimed by Spain, would consist in modulating the percentage of funds that the beneficiary countries will have to contribute in order to be eligible for budget aid, so that the rate can be reduced when they are going through economic crises.
This would confer a certain capacity to stabilize the economy at low moments.
The French minister anticipated, however, that there is still work to be done to establish the budget: "It is a solid basis for finalizing the euro zone budget in 2020," he said of the agreement reached.
The economic holders of the eurozone – to which those of the rest of the European Union join for this negotiation – had already reached an agreement in June that laid the foundations for the creation of this instrument, but two fundamental issues remained in the air : the volume it will have and where the funds will come from specifically.
The amount must be decided in the framework of the negotiation of the multi-annual EU budget, but agree who exactly will contribute the money and how this will be disbursed was the task pending for this meeting.
Although this instrument would draw on the multiannual budget for the entire EU, France and Germany proposed that the single currency countries make additional contributions, in order to increase their size in the future, something that did not convince the Netherlands and the Nordics in particular.
In the absence of knowing the details of the agreement, it is certain that more negotiations will be necessary to know what exactly this first embryo budget will have for the area of the single currency.
. (tagsToTranslate) Eurogroup (t) agrees (t) elements (t) budget (t) eurozone