European Council agrees to accelerate work on the digital euro legal framework and reiterates priorities for banking union and crisis management reform

The European Council published an account of ministers’ discussions covering banking-sector resilience, the European Stability Mechanism, and the digital euro, with a renewed focus on financial stability following recent market events. The exchange reinforced ministers’ commitment to further strengthen the banking sector, advance the banking union, and deliver outstanding reforms, including changes to the crisis management framework. Discussions with the Chair of the Single Supervisory Mechanism, Claudia Buch, and the Chair of the Single Resolution Board, Dominique Laboureix, focused on resolution preparedness, supervision, and regulatory issues. While ministers noted the European banking sector’s improved capital and liquidity positions and stronger balance sheets, they highlighted ongoing challenges including digital transformation, cyber threats, climate change, and potential impacts from global trade tensions. Work on the European Stability Mechanism (ESM) also featured, including preparation for the ESM annual meeting in June, a review of whether the ESM toolkit remains fit for purpose amid evolving challenges, and an update on Italy’s ratification of the revised ESM Treaty. On the digital euro, ministers took stock of progress on the legal framework across the Council, Commission, and European Parliament, alongside the European Central Bank’s technical work. They agreed to speed up efforts to resolve remaining issues and indicated that the Eurogroup, together with the Polish and Danish presidencies, will maintain political engagement to reach compromises as soon as possible.