The latest inflation data for the Euro Area. The final reading for April expected to confirm a slow down in core CPI to two point seven percent. The inflation outlook is improving ahead of the European Parliament elections in three weeks time, but concerns remain over the path for future growth, debt and competitiveness. Joining us now to discuss is the President of the Eurogroup, the Forum of euro Area, Finance Minister Finance Ministers, and Irelands Minister of Public Expenditure, Pascal
dona Who. Pascal dona Who, Good morning, Good morning, Stephen, how are you. I'm good, thank you, Great to see you in the Bloomberg Radio studio. So let's talk about the growth outlook. Then we have the update from the European Commission this week. First quarter better than expected, path ahead not looking great. How much of a concern is that?
Well, actually, the path ahead shows growth. The path ahead shows growth accelerating next year to around one and a half percent. And for much of the last two years to commentary and analysis has been about the European Union and the euro Area moving into recession. That did not happen. We managed to keep our economies growing despite the war
or in inflation. That being said, I think the debate that we're having within Europe at the moment is as we've been successful in getting inflation down and avoiding recession, the challenging the medium term is to look at how Europe can grow faster than it has grown for some years, and that is a debate now that is underway, and I'd anticipate decisions will be taken about that on a range of economic policy areas later on in this year, in early twenty twenty five.
And when it comes to concerns about inflation, I wonder what you think are the biggest risks to the outlook.
I think the risks to the outlook are ones that are supplied driven mother than demand driven. I think within the euro Area, for reasons of design and choice, I think we've been reasonably successful in a complex environment in avoiding budget policy contributing to demand and being a contributory
factor to inflation stayin high. I think the risk that we're all aware of, particularly in open economies such as Ireland, is we get another supply side shock, particularly with regard to energy, and that affects that we're making not happening to a high level at the moment, but it's a risk that we're acutely aware of now.
When the French president of Maanuel Macron spoke to Bloomberg earlier this week, he again pointed to the lack of the capital markets union as being one of the issues that's holding back growth in the euro Area. This is something that you've been working on for a long time at the Eurogroup. How far away does capital markets look now?
So we have a capital markets a degree of union that we've had within the Single markers. But I think the critique is a fair one. We have not made the kind of progress that we should have made over the last number of years. And if I go back to the very first question you button me around growth, what we have to do is look at how European
savings can be a contributory factor to European growth. The Eurogroup has reached a political agreement on the action steps that we believe can be taken and should be taken in the year ahead to deliver that progress, and I believe we can make fast progress in this area. And on Monday night, all finance ministers within the European Union met again in a meeting which I shared to recommit ourselves to that and to look at how we will deliver those action steps.
We are heading into the European Parliament elections, we're going to have a new commission elected after that. That essentially puts a lot of work at a Brussels level on hold for several months. Now, what is the timescale when do you think we might see perhaps a full draft of what the capital market inn would look at.
So I'm very much aware of that as a challenge, and that is why what we decided within the Eurogroup is we wanted to reach agreement on political priorities that would influence and guide to the decisions that a new
Commission would take. Commissioner Marine McGinnis I think has done great work on developing capital markets during her term, but we want to use the opportunity of a new Commission being formed as an opportunity to say to that, then, new Commission, these are the areas that we want to act on. And this has been informed by many things a national level. You'll be aware of the debate that's happening in France led by Christianie who's made a very
interesting contribution to that discussion. That's now happening in Germany, happening in economies such as Slovenia, it's happening in an Ireland. There's real momentum now underway.
But if you can't get the full capital markets union, and do you think it's a better idea to aim for a smaller group of EU countries going ahead with more cooperation if you can't get it at the EU level. This is, of course the idea of the EU Economy Commissioner is that one you support.
So I think if you look at the European Union, you never reach a full union in any area of policy. A full and complete union is always up there in the distant horizon. The question is can you deepen the union that you have? The European Union is a political project. It never ever reaches a final destination. It's all about how you can deepen what we have and I believe
we can do that. And to deal therefore with your question, my very strong preference would be that we make progress at the EU twenty seven level rather than in smaller groups, because you know, one group of countries deeper integration is another group of countries fragmentation, and I believe we can
do it. An EU twenty seven level. But for example, the calls that are Minister Bruno la Mayer, my French friend and colleague, has made in this area I think have been a really helpful catalyst in this debate to look at how we accelerate progress at EU twenty seven level.
So actually a smaller grouping would be a hindrance.
I wouldn't go that far. It's very much open to countries if they wish to cooperate further. But if you look at the EU overall, pockets of enhanced cooperation between smaller group of countries are relatively rare, and I think what is far more likely and achievable is how we do more together and by doing that perhaps therefore less in the incentive for group points of countries to come together.
In three weeks time, voters will be going to the polls and the European Parliament elections. A lot of the focus of that is on the rise of the far right groups. Would a stronger a right in the European Parliament derail these plans because it's set it back further.
Absolutely not, and we'll be making the case vigorously in Ireland, and my colleagues are making it across Europe for the dangers of the Far Ice and even if their parliamentary representation does rise, and I don't take that as a given, I'm very confident that political colleagues in a variety of parties will be able to come together and form a stable majority within the European Parliament.
And with your hat on as a minister in the Irish government, immigrations really become a contentious issue in Ireland because of well it's causing all these tensions in relations with the UK over the return of asylum seekers who've come through Northern Ireland. Do you have concerns that could destabilize the windsor Framework.
Absolutely, I'm absolutely confident in our ability to maintain and build under Windsor frameworks. So to the very contrary, Only this week I had two ministers, one from Chinfein one from the up in Dublin meeting me and I'll be going back up to meet them to look at the cooperation that's now on the way that's enabled by the wins of framework agreements. So I'm really optimistic actually about
our ability to make that work. We've a new Northern Ireland Executive from place which is full of optimism and determination now to make this framework achieve agreement work, and I believe it will. Really The big driver of the challenges that we face now with regard to migration in Ireland is we have the largest movement of human beings across Europe since World War Two and we're no different to any other country in grappling with that at the moment.
But I believe we will be able to deal with it in Ireland and maintain strong support for an open economy and society which arsh people are committed to.
Okay, Pascal Donna, who, Ireland's Minister of Public Expenditure and President of the Eurogroup, thank you very much for joining us.