On the final day, the EU summit focused on the economy in a situation where there was a ruckus on the banking front.
Prime minister Sanna Marin (sd.) characterized the President of the European Central Bank Christine Lagarde from a message about the banks’ situation to reassure. The EU’s political leaders heard Lagarde at the summit on the strategic orientations of the eurozone’s economic policy in Brussels on Friday.
The meeting was organized in a situation where three banks have collapsed in the United States in a short period of time. On Sunday of last week, Europe heard about the sale of the crisis bank Credit Suisse to the Swiss bank UBS.
Marin anticipates that we will hardly see sudden actions from the central bank.
– Of course, the situation with the banks was also discussed. We have such a volatile situation, but there is no reason for any panic braking or panic actions, he said.
Christine Lagarde herself did not hold a press conference after the meeting.
Deutsche Bank under pressure on Friday
On Friday, banks’ rates fluctuated more violently again, and the German Deutsche Bank’s rate in particular fell sharply. In Brussels, Chancellor Olaf Scholz reassured.
– Deutsche Bank has thoroughly reorganized and renewed its operating model and is a very successful bank, Scholz stated in his own press conference at the end of the Brussels meeting.
According to Marin, it is understandable that fluctuations are seen, because the situation is uncertain in many ways.
– However, the European Central Bank’s message was very consistent with what they have said before. I don’t think that there are going to be any very big sudden movements now, at least in the short term.
Three guidelines for the euro area
The final result of the euro summit was a three-point guideline for the euro area.
The statement first states that, despite high inflation and energy prices, this year ended in a better economic situation than expected.
The second point deals with the so-called economic control framework. However, it only states that the steering framework is a key support pillar in the economic and monetary union.
The steering framework has already started to be approached in other EU bodies in such a way that they would like to rein in debt sustainability with nationally tailored plans. Still, with the current information, we don’t want to throw in the trash the old rules about the state’s maximum 60 percent debt to gross domestic product ratio and three percent budget deficit.
The final message of the statement concerns capital market and banking dreams.
The desire is for there to be a real common market for capital in the EU, which would speed up investments.
The banking union was established to unify the banking system of the EU region and to increase regulation and supervision of the financial sector. Political leaders call for continued work to complete it.