18 June 2021

Remarks by Executive Vice-President Dombrovskis at the ECOFIN press conference

Clinch a compromise on the NPL Secondary Markets proposal; the Commission started to present its assessments of the first Recovery and Resilience Plans; the first fund-raising operation, raising €20 billion and seeing global demand from a wide range of investors.

You managed to wrap up work on several important files, and also to bring back to life files that were stuck. We were delighted at the compromise on public Country-by-Country Reporting, which will make the tax affairs of multinationals more transparent to the general public.

You also managed to clinch a compromise on the NPL Secondary Markets proposal, which means that new rules will be in place to sustain the recovery from the COVID pandemic.

Today, we met in a mood of cautious optimism that the recovery is now well and truly underway.

Just this week, we have reached two milestones in terms of making NextGenerationEU a reality. First, the Commission started to present its assessments of the first Recovery and Resilience Plans – 5 out of 24 received so far, with Luxembourg being the latest to receive a positive assessment. Congratulations!

Second, we have successfully conducted the first fund-raising operation, raising €20 billion and seeing global demand from a wide range of investors.

The collaboration with Member States has been intense to ensure all criteria of the Recovery and Resilience Facility are fully met. As you know, with every assessment, we have to see that each RRP addresses a significant number of country-specific recommendations, contributes to the digital and green transitions, helps boost economic and social resilience and enhance cohesion and convergence within the Union.

There is a good momentum now - and we need to keep it up.

After the Council's approval – which should hopefully go smoothly - the Commission and the country in question will sign the financing agreement to unlock, first and foremost,  the pre-financing of 13%.

In terms of fiscal policy, which we also discussed today, our message to Member States is that they should not prematurely withdraw fiscal support.

As of next year, as economic activity gradually returns to normal, fiscal policies should become more differentiated.

The Council recommends that: countries with high debt should pursue prudent policies, using the RRF to fund more investment, while countries with low sustainability risks should support their economies, including through the RRF.

Also quality matters. Once we reach more solid ground and health risks diminish, fiscal measures should gradually pivot to more targeted measures that help workers and companies to transition to the post-COVID world. And investment will be particularly important to sustain the recovery and create lasting growth.

Finally a word on tax:

I would like to thank the Portuguese presidency for the good progress made adapting the Commission's proposal on VAT rates to both the Green deal and public health objectives.

There was a constructive discussion on the Presidency compromise proposal, we will need to continue working to find the right balance between the equal treatment of Member States as regards the derogations and ways to restrict the proliferation of reduced rates.

There is broad support as regards the need to phase out the derogations that are contrary to the goals of the Green Deal, and to be more ambitious as regards the timeline for phasing out those derogations

We will support the Slovenian presidency to finalise this work.

We also discussed a specific proposal so that VAT can play a supportive role in times of crisis – so called ‘Buy and Donate' 

Today there was broad agreement as regards the need to have appropriate capacity to respond to the most immediate needs related to COVID 19 emergency, while at the same time continuing the work on the scope of more permanent arrangements to respond to similar crises in the future.

It's important we continue these discussions so we are fully prepared for any future emergency too.

European Commission

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