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Statement by Vice-President Dombrovskis at the ECOFIN press conference

The Latvian Presidency is navigating Europe through challenging times and I wish you every success.

Today we had fruitful discussions on some of our foremost priorities, ranging from the Investment Plan for Europe, EU budgetary issues to the next steps in the European Semester process.

Senator Mario Monti presented the first assessment report of the High Level Group on the EU’s Budget own resources system.

We also discussed country-specific issues such as Greece, Portugal, Cyprus, and Ukraine.

We are fully conscious of the economic, political and geopolitical challenges ahead of us. But we should also be mindful of the opportunities to grasp.

Today, Europe has all pre-conditions to grow again, with falling oil and energy prices, favourable exchange rates and a broadly neutral fiscal stance.

One of the main missing elements is more of far-reaching structural reforms that would make our economies more competitive.

If other European countries, including the largest European countries, implement significant reforms without hesitation, we should enjoy faster and more sustainable growth in Europe.

External circumstances – such as geopolitical tensions, should not become an excuse for not doing our own homework.

We have seen for ourselves that reforms do work. Countries that reformed – like Ireland, like Spain, like the Baltic States, including Latvia, are growing again.

And reforms are working in the case of Portugal. From the Commission side, I welcome the request by the Portuguese authorities to repay in advance some of the loans received from the IMF. The early repayment would result in net savings on interest payments of some half a billion euros and will have a positive impact on Portugal’s debt sustainability.

As regards the situation in Greece, we see that the difficult reforms carried out by Greece started to bear fruit last year, when the country returned to growth and jobs were being created.

It is important for Greece to build on these achievements, not to undo them and not to fall back into financial instability because that would have major economic and social consequences.

Europe has strong interest in seeing the Greek economy recover. We are here to support Greece.

There is strong political will on all sides to find a solution – in the interest Greece, and in the interest of Europe as a whole.

I believe that a solution can be found within the existing framework. It’s important that all sides stick to their commitments.

 

Today, the Council adopted conclusions on the Annual Growth Survey, setting out general economic and social priorities for the EU for this year.

The Council also adopted conclusions on the Alert Mechanism Report, which provides an early warning on macro-economic imbalances and identifies which Member States merit an in-depth review of their economies.

The next step of the European Semester cycle is 27 February, when the Commission will present 28 “country reports” analysing the economic policies of all EU Member States. This is the first time the Commission presents such country-specific reports so early in the European Semester cycle.

Instead of presenting them, as we usually do, together with the Country-Specific Recommendations. This time we do it three months earlier to allow more time for discussions with stakeholders and to allow more ownership by Member States.

On 27 February, we will also re-assess the situation of the Member States at risk of non-compliance with the Stability and Growth Pact in the light of information we have received, including final budgets for 2015, details on their structural reform programmes and updated macroeconomic scenarios as presented in our winter economic forecast.

This concerns in particular France, Italy and Belgium.

 

Along with structural reforms and fiscal responsibility, the Commission continues to push for progress on investment.

Ministers held a constructive discussion on the Commission’s proposal for a Regulation on the European Investment Fund.

With strong political will from both EU legislators, we hope that the regulation can be adopted by July and the Fund can be up and running by September. It’s an ambitious timetable, but I believe that with the help of Latvian Presidency we would be able to stick to this.

At the same time, we are fast-tracking work on the other parts of the Investment Plan, including the transparent project pipeline and a European Investment Advisory Hub, to ensure that these are ready by the time the new EFSI is active.

I am pleased that, today, the EIB Board of Governors agreed to allow pre-financing of SME projects linked to the EU Investment Plan before the summer. So we’ll actually start implementing some parts of the Investment Plan before summer.

It could pave the way for SMEs across Europe to benefit from the first funds from the new European Fund for Strategic Investments. The tentative timetable indicates this to be as early as May.

This is about more support for entrepreneurs who want to innovate, grow their businesses, hire more people and generate prosperity.

To regain people’s confidence in the European project, we need to deliver on growth and job creation. This should be our answer to populism and radical speech.

To deliver growth and jobs, all sides should stick to their commitments and act responsibly now.    

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