Speech of Eurogroup President, Paschal Donohoe, at the LSE's German Symposium 2021 - "The Euro – A Changing Europe in a Changing World"

• Thank you for the invitation today to speak to the LSE German symposium.
• Nevertheless, I am still delighted to be here today and I look forward to engaging with you all over the course of the next hour or so.
• We are all conscious that we are living in unusual and challenging times.
• The past year has shown us the preciousness and unpredictability of life.
• Indeed, pandemics or plagues for the want of a better word have been part of the human experience since time immemorial.
• We will celebrate the 20th anniversary of the euro as a physical currency during a time of great social and economic upheaval.
• That is surely what Schuman meant when he said: Europe will not be made all at once, or according to a single plan.
• This is useful to do in terms of learning from shared experiences but also in highlighting the benefit of collective action.
• In this context, I will also talk about the specific role of the Eurogroup and our own priorities.

First 20 years of the euro – origins and developments

• I distinctly remember the debates prior to the launch of the euro.
• There were certainly many worthy arguments against the euro.
• It was seen as impractical, too ambitious, it was coming too soon, it wouldnt survive its first major challenge.
• For me, the first tangible sign of success came from the sheer speed at which the euro was adopted in everyday life.
• In Ireland, as in the other member states, people took to the euro very quickly, within a matter of weeks.
• However, I would like to start by looking at how the euro has fared during times of challenge and crisis.
• The euro was designed to make our borders invisible, to provide stability and to facilitate our shared interconnectedness and interdependence.

The Euro during times of crisis

• At its most fundamental, the creditworthiness of the euro itself was under threat as this contagion spread.
• On reflection, the financial crisis demonstrated that the euro area was initially not fully equipped in the face of a very large shock.
• In fact, many of the measures and safeguards that we put in place over the past decade were crucial in tackling the economic crisis caused by COVID-19.
• In contrast to the financial crisis, which some claimed was an existential crisis for the currency itself, the euro is now positioned as a key asset and symbol of our resilience and strength.
• As President of the Eurogroup, I have seen on a daily basis the strength of the collective response to this crisis, which I could categorise in three ways.
• These decisions sent a clear signal to the markets that our responses to this crisis would be different.
• These reforms mean that crisis related funding will flow in a more efficient and effective manner.
• So in looking at this crisis, compared to before, there are two crucial differences.
• This has illustrated the importance of coordinated action and that we can only grow and prosper if we support each other.

Forward look – what is needed to secure recovery?

• We could just seek to welcome back the old normal many of us would just settle for that.
• And we could applaud ourselves for the unprecedented scale of our efforts.
• The truth is our initial emergency responses were profoundly empowered by the reforms we have undertaken over the last decade.
• We could not know that this work would be used to combat a worldwide pandemic.
• There is no doubt we will need to redouble our efforts in terms of vaccine roll-out in the weeks ahead.
• In time, fiscal policy will need to become more targeted to those sectors and citizens most in need.
• This encompasses, short-term decisions in relation to income protection; to more medium-term decisions on targeted fiscal supports to longer-term investment decisions.
• We will look closely at what is needed in the second half of this year but also in terms of the appropriate strategy for 2022.
• I am encouraged that we approach these important discussions from a position of consensus.

Conclusion

• From the perspective of a politician and a Finance Minister, the world is watching our actions in response to COVID-19.
• It is true our European interconnectedness was intertwined with the spread of the contagions that caused both of the major crises in the life of the euro.
• Yet it was precisely this reservoir of interconnectedness of shared destiny and solidarity that allowed us take the steps required to emerge stronger and more unified from these events.
• And let us end with Camus, from The Plague again: And indeed it could be said that once the faintest stirring of hope became possible, the dominion of plague was ended.

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