Written answers

Tuesday, 30 January 2018

Department of Finance

European Financial Forum

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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171. To ask the Minister for Finance the extent to which he has had discussions with his counterparts at EU level with a view to preventing an economic crash in the future. [4631/18]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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As Minister for Finance, I attend the monthly Economic and Financial Affairs Council of the European Union (ECOFIN) meetings; ECOFIN is responsible for EU policy in areas including economic policy.I also attend meetings of the Eurogroup, where the Ministers of the euro area member states discuss matters concerning their shared responsibilities related to the euro.The Eurogroup’s main task is to ensure close coordination of economic policies among the euro area member states and to promote conditions for stronger economic growth.

At both the ECOFIN and Eurogroup meetings, Ministers of the member states work alongside the European Commission and the European Central Bank, ECB, to take stock of the latest economic situation in the EU and euro area, including on the risks to the European economy’s growth prospects.

In relation to future economic prospects, I would point out that considerable progress has been made in reforming the architecture of the euro and in the wider EU.More co-ordinated economic governance, better fiscal rules, the advent of the European Semester, the development of a capital markets union and significant progress towards a banking union are just some of the measures which will enhance the economic resilience of the euro area and the wider EU.Having said that, further progress is needed in some areas.

The European economy is performing well at present with growth exceeding expectations in 2017 and growth of 2.1% is projected for 2018.The upturn is increasingly broad-based across EU countries.The recovery has been supported by a number of factors including sound macroeconomic policies, strong business and consumer confidence and a gradual improvement in world trade.

The European Commission’s Autumn Economic Forecast 2017 highlights risks to the European economy being broadly balanced.Downside risks relate to the process of the UK leaving the EU, global geopolitical instability and potentially tighter global financial conditions.While bank fragilities in the euro area have eased, low profitability and legacy issues, i.e. non-performing loans, remain a concern.On the upside, uncertainties have diminished, economic sentiment has improved and with the rebound outside Europe potentially leading to a stronger, more durable expansion in Europe.

Given the still high levels of unemployment and public and private debt across the EU, there are clearly no grounds for complacency.

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