Euro

• This is my first appearance as President of the Eurogroup before your Committee and it is an honour to be here.
• The Eurogroup also exchanged views on the economic situation with ECON Committee Chair Tinagli at its meeting in early-November 2020.
• Thank you again, Madam Chair for sharing the European Parliament's views with us in that discussion.
• Your views were very well made and I can assure you that Eurogroup members are focused on how we can drive an inclusive recovery.
• The European Parliament and the Eurogroup have a common interest in a well-functioning Economic and Monetary Union (EMU).
• European institutions and member states reacted swiftly to mitigate the socio-economic fallout of the Covid-19 crisis.

Economic situation and policy priorities

• Let me now say a few words on the economic situation.
• The global pandemic triggered an unprecedented economic contraction in 2020.
• The resurgence of infections - including the emergence of even more contagious virus mutations - and the return to the stricter containment measures are expected to weigh on economic activity in 2021.
• At the same time, compared to 2020, the economic outlook has improved.

Fiscal policies

• I believe it important that finance ministers debate and reach a common understanding on the appropriate fiscal stance by the summer.
• To avoid any misunderstanding, let me stress that this is not about an imminent withdrawal of fiscal stimulus.
• In relation specifically to the overall fiscal framework and the rules, these will be key considerations later in the year.
• As we make progress in overcoming the health crisis, the focus of fiscal policy should gradually shift from emergency support to supporting public investment and reforms that raise potential growth.
• We need to coordinate our efforts for sound fiscal plans for the future so that when the time comes to adjust, we are prepared.

Macroeconomic imbalances

• We also need to be mindful of the fact that the Covid-19 crisis is not only increasing the levels of public indebtedness, but is also exacerbating other pre-existing macroeconomic imbalances and creating new risks.
• There is also a risk that income and productivity growth will remain weak for a rather long period.
• Addressing imbalances is particularly important for those countries that were already facing challenges in these areas already before the current crisis, notwithstanding their remarkable and effective efforts over the past years.
• It is appreciated that imbalances need to be tackled through an array of actions across policy domains.

Recovery and Resilience / Euro area Recommendations

• This is not only in countries individual interest, but in the interest of the euro area as a whole, as widening economic divergences between the euro area countries would hamper the smooth functioning of the currency union.
• For this reason, it is so important that the euro area countries incorporate the euro area dimension in their RRPs.
• The Eurogroup will review how euro area member states implement the euro area recommendations through their RRPs.
• It also reflects the determination of euro area finance ministers to coordinate national recovery efforts including in the context of the RRF.
• Our objective is to ensure that the positive impact of the RRF on the euro area exceeds the sum of the positive impacts for individual euro area member states.

Strengthening EMU: ESM reform and SRF backstop

• It also requires us to strengthen the institutional framework of the Economic and Monetary Union.
• At the end of last year, we reached an agreement on the reform of the European Stability Mechanism.
• Importantly, the Eurogroup agreed that the common backstop could be introduced earlier that is, ahead of 1 January 2024, by which time the SRF will be fully built up with financial contributions from the banking sector.
• The ESM's new features including the common backstop to the Single Resolution Fund, should be operational as of 2022, following the completion of national ratification processes.
• This, together with a generally more effective and flexible ESM will boost confidence in the euro areas ability to quell crises before they escalate.

Completing the banking union

• I have the firm intention to capitalise on the cooperative spirit that prevailed throughout 2020 to make good progress on the completion of the banking union.
• The current crisis clearly demonstrates how much a fully-fledged banking union is needed.
• Completing it should be part of our effort to ensure sustainable recovery.
• Of course, the experience of the last few years and even over the last few months - has shown that completing the banking union is anything but straightforward.
• At the Euro Summit last month, leaders asked the Eurogroup to produce a stepwise and time-bound work plan on all outstanding elements needed to complete the banking union.

Digital euro

• The Eurogroup is also following, with great interest, developments in digital finance and how these could impact the euro area economies.
• This concerns the Commissions work on digital finance, and in particular the ECBs work on a possible digital euro.
• I am therefore convinced that euro area member states are key stakeholders in this project.

International role of the euro

• The issue of sovereignty brings me to my final point: the international role of the euro.
• I welcome the Commission Communication outlining different initiatives to promote a stronger role of the euro on the international scene.
• A stronger international role of the euro is good for Europe and for the global economy.

Concluding remarks

I would like to conclude on this optimistic note and reassure you of the Eurogroup's resolve to do all we can to deliver a strong, inclusive, and lasting recovery. Coordination of economic policies is more important than ever before. Our economies can only grow out of this crisis if we continue supporting each other and working together. This is what I am relentlessly working towards.

• PRESS RELEASE

  ECB to invest in Bank for International Settlements green bond fund

  25 January 2021

  The European Central Bank (ECB) has decided to use part of its own funds portfolio to invest in the euro-denominated green bond investment fund for central banks (EUR BISIP G2) introduced by the Bank for International Settlements (BIS).

• The BIS green bond fund invests in renewable energy production, energy efficiency and other environmentally friendly projects.
• In September 2019, the BIS launched a US-dollar-denominated green bond fund under the same initiative.
• The ECB is exploring a possible expansion of use of low-carbon benchmark indices to fixed-income asset classes within its pension fund.

• PRESS RELEASE

  Euro banknote counterfeiting at historically low level in 2020

  22 January 2021

  Some 460,000 counterfeit euro banknotes were withdrawn from circulation in 2020 (220,000 in the second half of the year), a decrease of 17.7% when compared with 2019.

• The likelihood of receiving a counterfeit is very small, as the number of counterfeits remains very low compared to the over 25 billion euro banknotes in circulation.
• In 2020, 17 counterfeits were detected per 1 million genuine banknotes in circulation, a historically low level (see the chart below).
• The Eurosystem has a duty to safeguard the integrity of euro banknotes and to continue improving banknote technology.

• PRESS RELEASE

  Euro banknote counterfeiting at historically low level in 2020

  22 January 2021

  Some 460,000 counterfeit euro banknotes were withdrawn from circulation in 2020 (220,000 in the second half of the year), a decrease of 17.7% when compared with 2019.

• The likelihood of receiving a counterfeit is very small, as the number of counterfeits remains very low compared to the over 25 billion euro banknotes in circulation.
• In 2020, 17 counterfeits were detected per 1 million genuine banknotes in circulation, a historically low level (see the chart below).
• The Eurosystem has a duty to safeguard the integrity of euro banknotes and to continue improving banknote technology.