European Council agrees to speed up work on the digital euro legal framework and renews push to finalise banking union crisis management reforms

The European Council summarised ministers’ discussions on banking-sector resilience, the European Stability Mechanism (ESM) and the digital euro, with ministers agreeing to accelerate efforts to reach compromises on the remaining elements of the digital euro legal framework and reiterating the need to further strengthen the banking sector and advance the banking union, including finalising the reform of the crisis management framework. The meeting included the biannual exchange with Single Supervisory Mechanism chair Claudia Buch and Single Resolution Board chair Dominique Laboureix on supervision, resolution, preparedness and regulatory issues, set against “significant market events”. Ministers noted the banking sector’s strengthened capital and liquidity positions and balance sheets, while highlighting ongoing challenges including digital transformation, cyber threats and climate change, and the need to monitor the effects of global trade tensions. Ahead of the ESM annual meeting in June, ministers discussed keeping the ESM toolkit fit for purpose and received an update on Italy’s ratification of the revised ESM treaty; they also reviewed global economic developments following the G7 meeting in Washington and agreed on the need to reduce trade and geopolitical tensions. On the digital euro, ministers took stock of work by the Council, European Commission and European Parliament on the legal framework, alongside the European Central Bank’s technical work, and agreed to speed up work and seek compromises “as soon as possible”. The Eurogroup, together with the Polish and Danish presidencies, will continue political engagement on the project, with further dialogue expected around the June Eurogroup and ESM Board of Governors meetings.