The European Council published the text of a speech by Eurogroup President Paschal Donohoe in Berlin setting out how euro area finance ministers are framing their policy agenda amid geopolitical fragmentation, higher defence and security demands, and ongoing green and digital investment needs. He highlighted the Eurogroup’s work on boosting competitiveness, advancing deeper and more integrated capital markets, maintaining fiscal sustainability, and supporting the European Central Bank’s digital euro project. On competitiveness, the Eurogroup concluded a series of discussions in November with a statement spanning economic security, innovation and productivity, energy costs and resilience, revitalising the single market, and coordinated investment strategies, followed by endorsement of a three-pronged strategy to improve competitiveness, resilience, and macroeconomic and financial stability. On capital markets, he recalled that the Eurogroup agreed a set of proposals on the future of European capital markets last March at the request of EU leaders and after engagement with industry, and is now pursuing a bottom-up exercise to support the European Commission’s Savings and Investment Union initiative. For fiscal policy, he linked increased budget pressure from defence and security to the need for market confidence and efficient use of funds, pointing to the recently reformed EU fiscal framework’s focus on debt sustainability, investment support, transparency and predictability, and flexibility for extraordinary circumstances. On the digital euro, he argued that shifting payment systems, the weaponisation of financial linkages, and the growth of new forms of digital money and crypto assets make the ECB’s work critical, with the Eurogroup leading political discussions on design choices and communication as the project moves to its next phase.

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