Paschal Donohoe confident of 'inclusive and strong recovery' after Covid

Minister for Finance Paschal Donohoe debated recovery measures for the Eurozone with Europe's other finance ministers. Photo: Gareth Chaney/Collins

Paschal Donohoe says there will be "no policy cliff edge" from Europe and "overall budgetary policy will continue to support the economy," after chairing his first Eurogroup meeting.

The Minister for Finance was elected to President of the Eurogroup in July, and met with finance ministers across Europe in Berlin today to discuss "national reform plans to support the people of Europe to ensure that this recovery can reach all," and debated recovery measures for the Eurozone going forward.

Despite previous stalemates and arguments between the Eurogroup members on how to finance Europe's recovery, today's press conference presented a united front.

"Member states are developing new policies to boost the recovery and will be no sudden stop, no policy cliff edge and overall budgetary policy will continue to support the economy," Mr Donohoe said.

This consensus gives me confidence that we can build an inclusive and strong recovery.

"I want to use the Eurogroup to help forge a greater consensus and priority areas on reforms to build a path towards recovery. 

"I sense the shared willingness towards the coordinated approach on budgetary policy for using the Euro group as a forum to reach this understanding across the euro area.

"Some crisis schemes will expire, but others will be extended, and improved.

"We acknowledge the scale of response that has already been delivered back in April, the work of the Eurogroup on achieving three safety nets to get us through the crisis and the (European Investment Bank) EIB guarantee for firms, pandemic crisis support for the European Stability Mechanism (ESM) and a sure instrument to channel jobs into that, which matters so much at the moment. The maintenance of money, the maintenance of jobs and throwing money into schemes that protect those jobs."

Mr Donohoe stuck a positive tone despite a stark forecast from his colleague, Italian finance minister Roberto Gualtieri, who added: "We expect that most member states will not have reached their pre-crisis levels of GDP by the end of 2021, with an average gap of 2.5%, on average, in relation to 2019.

"In short, the road to recovery is still faced with uncertainty."

Mr Gualtieri warned against "premature withdrawal of support for the fragile recovery in jeopardy".

"As I told ministers this morning; If we miscalculate the timing of this landing, we risk damaging the European economy. 

"Moreover, if we limit ourselves to returning to the previously existing situation without making the necessary changes to our common framework, we would not have known the lesson of the COVID crisis.

"In short, the transition from an exceptional situation to a new normality is a challenge, requiring very careful management."