Latest news with #Eurogroup
Yahoo
16-05-2025
- Business
- Yahoo
Post-war rules-based system is up for negotiation, Eurogroup president tells Euronews
Rules and institutions established under US leadership in the aftermath of World War II are up in the air and up for negotiation, Irish Finance Minister and Eurogroup President Paschal Donohoe has told Euronews in an interview. With the United States threatening to withdraw defence support from Europe, the continent has been looking to strengthen its military resources. But according to Donohoe, this is not the only challenge that Europe has to face after Donald Trump's arrival at the White House. 'A theme of what is now happening is the rules, the institutions that were set up in the aftermath of World War II, set up with American leadership. They're now being challenged, they're being contested," Donohoe said. "The institutions that we know, the rules in relation to trade and tax, are all now open for renegotiation. That is now what is happening." Donohoe was clear that no one should assume progress is inevitable, echoing statements by French President Emmanuel Macron and former Italian Prime Minister Mario Draghi that Europe is vulnerable and mortal. "Our Europe is mortal. It can die," said Macron, while Draghi talked about the risk of a 'slow and agonising death.' For the president of the Eurogroup, 'All political order, if not capable of dying, is capable of declining. That is one of the many lessons that we have from the study of history. The European Union is no different. If you believe progress is inevitable, you're on your way to seeing that progress decline,'' he said. As the Irish defence minister, Donohoe remains sceptical about common borrowing for defence. He advocated for common borrowing to recover from the COVID-19 crisis, but is not convinced when it comes to military spending, believing national contributions should bridge funding gaps needed to rearm Europe. "It's likely that progress will be made in areas of procurement. Therefore, that means that if there is a defence dimension to the next multiannual financial framework (MFF) and the EU budgets, I still think it's likely to be smaller than the national contribution that members make to their own security and the security of the EU,' Donohoe said. He pointed out that the EU is still repaying the COVID-19 recovery fund (RRF) designed to make EU economies more resilient during the pandemic. An evaluation of the RRF is needed before the EU embarks on new commitments, he said. He underlined the need for a more global picture of defence spending since defence will also be a dimension of the next multiannual budget of the European Union. Member states will soon start negotiating the next spending period, running from 2028 to 2034. 'It's difficult to have that debate and not divorce us from the broader reality that firstly we'll be negotiating a budget for the new European Union, "Secondly, Next Generation EU, which is the new form of common borrowing that we have to deal with the crisis of a number of years ago of the pandemic, that is still happening and still being evaluated and thus in relation to all of that both still has to issue and still has be refinanced and dealt with at some point in the future, all of those things are going to come together,'' he said. Donohoe is running for a third term as leader of the Eurogroup, and so far, the names of other possible candidates have not been made public. He said he felt encouraged by the level of support he currently has, though he acknowledged no one can ever be too sure about what comes next. 'An awful lot can happen in a number of weeks in the world that we're in, but I am encouraged by the support I've currently received,' Donohoe concluded.
Yahoo
16-05-2025
- Business
- Yahoo
Post-war rules-based system is up for negotiation, Eurogroup president tells Euronews
Rules and institutions established under US leadership in the aftermath of World War II are up in the air and up for negotiation, Irish Finance Minister and Eurogroup President Paschal Donohoe has told Euronews in an interview. With the United States threatening to withdraw defence support from Europe, the continent has been looking to strengthen its military resources. But according to Donohoe, this is not the only challenge that Europe has to face after Donald Trump's arrival at the White House. 'A theme of what is now happening is the rules, the institutions that were set up in the aftermath of World War II, set up with American leadership. They're now being challenged, they're being contested," Donohoe said. "The institutions that we know, the rules in relation to trade and tax, are all now open for renegotiation. That is now what is happening." Donohoe was clear that no one should assume progress is inevitable, echoing statements by French President Emmanuel Macron and former Italian Prime Minister Mario Draghi that Europe is vulnerable and mortal. "Our Europe is mortal. It can die," said Macron, while Draghi talked about the risk of a 'slow and agonising death.' For the president of the Eurogroup, 'All political order, if not capable of dying, is capable of declining. That is one of the many lessons that we have from the study of history. The European Union is no different. If you believe progress is inevitable, you're on your way to seeing that progress decline,'' he said. As the Irish defence minister, Donohoe remains sceptical about common borrowing for defence. He advocated for common borrowing to recover from the COVID-19 crisis, but is not convinced when it comes to military spending, believing national contributions should bridge funding gaps needed to rearm Europe. "It's likely that progress will be made in areas of procurement. Therefore, that means that if there is a defence dimension to the next multiannual financial framework (MFF) and the EU budgets, I still think it's likely to be smaller than the national contribution that members make to their own security and the security of the EU,' Donohoe said. He pointed out that the EU is still repaying the COVID-19 recovery fund (RRF) designed to make EU economies more resilient during the pandemic. An evaluation of the RRF is needed before the EU embarks on new commitments, he said. He underlined the need for a more global picture of defence spending since defence will also be a dimension of the next multiannual budget of the European Union. Member states will soon start negotiating the next spending period, running from 2028 to 2034. 'It's difficult to have that debate and not divorce us from the broader reality that firstly we'll be negotiating a budget for the new European Union, "Secondly, Next Generation EU, which is the new form of common borrowing that we have to deal with the crisis of a number of years ago of the pandemic, that is still happening and still being evaluated and thus in relation to all of that both still has to issue and still has be refinanced and dealt with at some point in the future, all of those things are going to come together,'' he said. Donohoe is running for a third term as leader of the Eurogroup, and so far, the names of other possible candidates have not been made public. He said he felt encouraged by the level of support he currently has, though he acknowledged no one can ever be too sure about what comes next. 'An awful lot can happen in a number of weeks in the world that we're in, but I am encouraged by the support I've currently received,' Donohoe concluded.
Euronews
16-05-2025
- Business
- Euronews
Post-war rules-based system is up for negotiation, Eurogroup head says
Rules and institutions established under US leadership in the aftermath of World War II are up in the air and up for negotiation, Irish Finance Minister and Eurogroup President Paschal Donohoe has told Euronews in an interview. With the United States threatening to withdraw defence support from Europe, the continent has been looking to strengthen its military resources. But according to Donohoe, this is not the only challenge that Europe has to face after Donald Trump's arrival at the White House. 'A theme of what is now happening is the rules, the institutions that were set up in the aftermath of World War II, set up with American leadership. They're now being challenged, they're being contested," Donohoe said. "The institutions that we know, the rules in relation to trade and tax, are all now open for renegotiation. That is now what is happening." Donohoe was clear that no one should assume progress is inevitable, echoing statements by French President Emmanuel Macron and former Italian Prime Minister Mario Draghi that Europe is vulnerable and mortal. "Our Europe is mortal. It can die," said Macron, while Draghi talked about the risk of a 'slow and agonising death.' For the president of the Eurogroup, 'All political order, if not capable of dying, is capable of declining. That is one of the many lessons that we have from the study of history. The European Union is no different. If you believe progress is inevitable, you're on your way to seeing that progress decline,'' he said. As the Irish defence minister, Donohoe remains sceptical about common borrowing for defence. He advocated for common borrowing to recover from the COVID-19 crisis, but is not convinced when it comes to military spending, believing national contributions should bridge funding gaps needed to rearm Europe. "It's likely that progress will be made in areas of procurement. Therefore, that means that if there is a defence dimension to the next multiannual financial framework (MFF) and the EU budgets, I still think it's likely to be smaller than the national contribution that members make to their own security and the security of the EU,' Donohoe said. He pointed out that the EU is still repaying the COVID-19 recovery fund (RRF) designed to make EU economies more resilient during the pandemic. An evaluation of the RRF is needed before the EU embarks on new commitments, he said. He underlined the need for a more global picture of defence spending since defence will also be a dimension of the next multiannual budget of the European Union. Member states will soon start negotiating the next spending period, running from 2028 to 2034. 'It's difficult to have that debate and not divorce us from the broader reality that firstly we'll be negotiating a budget for the new European Union, "Secondly, Next Generation EU, which is the new form of common borrowing that we have to deal with the crisis of a number of years ago of the pandemic, that is still happening and still being evaluated and thus in relation to all of that both still has to issue and still has be refinanced and dealt with at some point in the future, all of those things are going to come together,'' he said. Donohoe is running for a third term as leader of the Eurogroup, and so far, the names of other possible candidates have not been made public. He said he felt encouraged by the level of support he currently has, though he acknowledged no one can ever be too sure about what comes next. 'An awful lot can happen in a number of weeks in the world that we're in, but I am encouraged by the support I've currently received,' Donohoe concluded.
Euronews
15-05-2025
- Business
- Euronews
Post-war rules-based system is up for negotiation, says Eurogroup president
Rules and institutions established under US leadership in the aftermath of World War II are up in the air and up for negotiation, the Irish finance minister and Eurogroup President Paschal Donohoe has told Euronews in an interview. With the United States threatening to pull back defence support from Europe, it has left the continent looking to strengthen its military resources. But according to Donohoe, this is not the only challenge that Europe has to face after Donald Trump's arrival at the White House. 'A theme of what is now happening is the rules, the institutions that were set up in the aftermath of World War II, set up with American leadership. They're now being challenged, they're being contested. The institutions that we know, the rules in relation to trade and tax, are all now open for renegotiation. That is now what is happening," he said. Donohoe was clear that no-one should assume progress is inevitable, echoing statements by French President Emannuel Macron and former Italian Prime Minister Mario Draghi, that Europe is vulnerable and mortal. "Our Europe is mortal. It can die", said Macron, while Draghi talked about the risk of a 'slow and agonising death'. For the president of the Eurogroup, 'All political order, if not capable of dying, is capable of declining. That is one of the many lessons that we have from the study of history. The European Union is no different. If you believe progress is inevitable, you're on your way to seeing that progress decline,'' he said. The Irish finance minister Paschal Donohoe remains sceptical about common borrowing for defence. The Irish minister advocated for common borrowing to recover from the Covid crisis, but is not convinced when it comes to military spending, believing national contributions should bridge funding gaps needed to rearm Europe. "It's likely that progress will be made in areas of procurement. Therefore, that means that if there is a defence dimension to the next multiannual financial framework (MFF) and the EU budgets, I still think it's likely to be smaller than the national contribution that members make to their own security and the security of the EU,' Donohoe said. He pointed out that the EU is still repaying the Covid recovery fund (RRF) designed to make EU economies more resilient during the pandemic. An evaluation of the RRF is needed before the EU embarks on new commitments, he said. And he underlined the need to have a more global picture on defence spending, since defence will also be a dimension of the next multi annual budget of the European Union. Member states will soon start negotiating the next spending period, running from 2028 to 2034. 'It's difficult to have that debate and not divorce us from the broader reality that firstly we'll be negotiating a budget for the new European Union. Secondly Next Generation EU, which is the new form of common borrowing that we have to deal with the crisis of a number of years ago of the pandemic, that is still happening and still being evaluated and thus in relation to all of that both still has to issue and still has be refinanced and dealt with at some point in the future, all of those things are going to come together,'' he said. Donohoe is running for a third term as leader of the Euro area, and so far the names of other possible candidates have not been made public. He said he felt encouraged by the level of support that he currently has, though he acknowledged no-one can ever be too sure about what comes next. 'An awful lot can happen in a number of weeks in the world that we're in, but I am encouraged by the support I've currently received,' Donohoe concluded.
Time of India
14-05-2025
- Business
- Time of India
Germany's massive spending spree: How will the EU react?
Germany's new finance minister, , arrived in Brussels on Monday with a bold message: Berlin is ready to spend big. With plans to invest €1 trillion ($1.1 trillion) in defence and infrastructure over the next decade, the country is casting off its long-standing reputation for fiscal restraint. Tired of too many ads? go ad free now But as EU capitals digest the scope of the plan, many wonder whether Germany is still playing by the very rules it once insisted others must follow. Klingbeil, in office just a week, struck a confident tone at his first Eurogroup meeting with eurozone finance ministers. He laid out Berlin's plans to boost growth by cutting red tape, lowering energy costs and addressing labour shortages. "All of this will lead to more growth, and that's also positive for Europe," he said. Germany's pivot began in January, when the Bundestag suspended the country's constitutional debt brake, a cornerstone of German economic orthodoxy for over a decade. Backed by a broad political majority, the move freed Berlin to bypass strict borrowing limits. In March, parliament took the next step, approving plans to raise €1 trillion in new debt. Testing the limits of EU fiscal rules The scale of the plan now puts Germany on a collision course with the EU's fiscal framework. "This sets a dangerous precedent," warned Armin Steinbach, a fellow at the Bruegel think tank and professor at HEC Paris Business School. Under the , member states are expected to keep deficits below 3% of gross domestic product (GDP) and debt below 60%. The rules were softened during the COVID-19 pandemic and again after Russia's invasion of Ukraine, with Brussels allowing more fiscal flexibility, especially for defense. Tired of too many ads? go ad free now In March, the Commission revised the rules and activated a so-called to give member states temporary leeway, particularly for security spending. Germany argues its plans fall within that scope. "I assume the rules we've changed in Europe apply. They clearly say there is more flexibility now," Klingbeil told reporters, stressing that reforms and higher growth potential would ultimately support European stability. Brussels under pressure But critics aren't convinced. While the new rules offer more flexibility for defence, Germany's package also includes sweeping investments in infrastructure, energy and digitalization, areas not explicitly covered by the revised rules. "This goes well beyond what the rules allow," said Steinbach. If the Commission signs off on Berlin's plan, it could trigger a wave of political backlash. "Special treatment for Germany would undermine the EU's no-discrimination principle," Steinbach warned. Other countries with high debt levels, like Italy or France, could demand similar exceptions, potentially weakening fiscal discipline across the bloc, leading to an economic crisis, he added. A tough dilemma for Europe But curtailing Germany's spending plans is also not an easy option, as they come at a critical time for the EU. With geopolitical tensions rising and economic growth stagnating, many here in Brussels are hoping for economic momentum starting from Berlin. Despite being in recession for three years, "Germany remains the most important European country, with the largest economy and enormous potential," Karel Lannoo of the Brussels-based Center for European Policy Studies (CEPS) told DW. The question, however, is whether Germany's spending will have a meaningful ripple effect in other countries, as Klingbeil announced during his visit. Steinbach is sceptical: "The spillovers are there, but their magnitude is unclear." Not a restart, but a reset Klingbeil, for his part, insists this is no rupture with Europe's past. "We don't need a restart in European cooperation, but we do want to take it to the next level," he said. Steinbach agrees that reform is needed, but urges policymakers not to sidestep the system. "The current rules don't reflect the new geopolitical reality, especially with rising defence needs and the return of Donald Trump," he said. Rather than abandoning the framework, he calls for a targeted update: Slightly more room for national investment, paired with EU-level borrowing to fund collective defence. But even under optimistic timelines, those changes wouldn't kick in before late next year. In the meantime, the Commission faces a critical choice. Allow Germany to push the fiscal boundaries now, or risk stifling investment when Europe arguably needs it most. A decision is expected by summer, but one thing is already apparent: Germany's new fiscal path is reshaping Europe's economic debate, and testing the limits of the rules it helped write.
