Economy of Europe

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• 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.

Press contacts

• Erich Sixt: "With Nico Gabriel, a highly respected and long-standing colleague is strengthening our Management Board.
• Pullach, January 27, 2021 - The experienced mobility expert and long-time SIXT Operations and Tech Manager Nico Gabriel will be joining the Management Board of Sixt SE as Chief Operating Officer (COO).
• Erich Sixt, Chairman of the Management Board of Sixt SE: "With Nico Gabriel, a highly respected and long-standing colleague is strengthening our Management Board.
• Friedrich Joussen, Chairman of the Supervisory Board of Sixt SE: "SIXT is positioning itself for the future by appointing Nico Gabriel to the Management Board.

SPEECH

Hearing at the Committee on Economic and Monetary Affairs of the European Parliament

Introductory statement by Frank Elderson, Member of the Executive Board of the ECB, at the ECON Committee of the European Parliament

Brussels, 25 January 2021 Honourable members of the Economic and Monetary Affairs Committee, Ladies and gentlemen,

Introduction

• The European Parliaments role in this process reflects the highest principles of democracy and accountability.
• Interactions such as this are of great value to European citizens, given the expertise in supervisory topics acquired by this Committee since the establishment of ECB Banking Supervision.
• In my remarks today, I will briefly describe my previous experience and how it may be relevant for my role as Vice-Chair of the ECBs Supervisory Board.
• During my nine years on the Governing Board of De Nederlandsche Bank I was responsible for banking supervision and resolution.

Immediate and ongoing challenges: managing the impact of the COVID-19 pandemic on the banking sector and dealing with the consequences of Brexit

• The impact of the crisis on the European banking sector has yet to be fully revealed.
• By releasing capital buffers, we increased banks lending capacity and enabled businesses to keep operating.
• And by restricting dividend distributions, we ensured that banks retained capital to absorb losses.
• But as the economic shock materialises further, businesses and consumers may find it more difficult to repay their loans.
• The first step is to obtain clarity on banks asset quality and make sure that they proactively tackle emerging NPLs.
• Our goal here is to ensure that these banks can safely manage their business and risks in and from the Continent.

Looking forwards: digitalisation, climate and biodiversity, and anti-money laundering and combating the financing of terrorism (AML/CFT)

• While no major operational incidents occurred during the pandemic, operational and cyber risks have clearly increased.
• We need to continue our close dialogue with the financial industry and keep promoting strong risk management and controls at banks.
• Also, as I mentioned during my last appearance before this Committee, we need to ensure banks adequately manage climate-related and environmental risks.
• I am pleased that the ECBs supervisory activities are becoming increasingly concrete in this regard.
• The ECB will also comprehensively review banks practices in this area and conduct a climate risk stress test exercise in 2022.
• I very much welcome the Commissions proposals on a European approach to AML/CFT supervision involving a single supervisor.

Finalising the architecture of the banking union

• Finally, the work to improve the banking unions institutional and regulatory architecture must continue.
• Regulatory harmonisation is still lacking in some areas, which forces ECB Banking Supervision to apply 21 different legal regimes.
• It is also high time to complete the banking union by putting in place a European deposit insurance scheme.
• This will allow us to further deepen the banking union and enhance the efficiency of the European banking market, while ensuring that all deposits are equally protected.

Conclusion