01 December 2020

Executive Vice-President Dombrovskis at the ECOFIN press conference

"We now need to bring discussions on the Recovery and Resilience Facility to a good conclusion. Our people and businesses are waiting for its funding to flow. It will provide a unique opportunity to push Europe's recovery forward and turn our economies around."

The Presidency's response to the crisis and its organisational skill at such a time have been exemplary. I would particularly like to mention its unwavering commitment to making progress on the Capital Markets Union and taxation reform – just two examples.

I will be coming back to this topic shortly.

As we approach year's end, Europe is caught up in the second wave of the pandemic. Our economic outlook remains very uncertain and it is clear that the recovery will take longer than initially thought.

Today, the European Commission presented its European Semester autumn package to ministers. It is another step in our efforts to guide all EU economies into calmer waters.

Briefly, its priorities are: address the health crisis; support the economic recovery; strengthen the resilience of our economies and societies, while facilitating the green and digital transitions.

We now need to bring discussions on the Recovery and Resilience Facility to a good conclusion. Our people and businesses are waiting for its funding to flow. It will provide a unique opportunity to push Europe's recovery forward and turn our economies around.

The reforms and investments linked to the Facility must take place in a macroeconomic and financial environment that bolsters confidence.

Fiscal policy should continue to support the economic recovery in 2021. When economic conditions allow, Member States should resume fiscal policies that aim to achieve prudent medium-term fiscal positions and debt sustainability.

We also need a strong financial system to support long-term growth. That means deep integrated capital markets and a strong banking sector.

Today, ministers held a broad and timely discussion on the progress made in two key elements of Economic and Monetary Union: the Banking Union and Capital Markets Union.

Regarding banks: they are playing a key role in the recovery by continuing to lend to the real economy.

But we still need to go further on building the Banking Union.

Germany's EU Presidency organised useful discussions in four key areas: improving crisis management; greater integration of the banking sector and the home-host balance; regulatory treatment of sovereign exposures; designing a European deposit insurance scheme based on a hybrid model.

I hope that the incoming Portuguese Presidency will continue  this work.

Yesterday, the Eurogroup made decisive headway towards completing the Banking Union by agreeing on the early introduction of the backstop and ESM reform. These steps will strengthen the safety net, which we created for European citizens.

We look forward to the Euro summit later this month providing new impetus to the Banking Union.

Ministers also discussed Council conclusions on the Capital Markets Union. Here, I would like to thank the German Presidency for making this essential project a priority and for its excellent work to reach conclusions by the end of the year.

We need the CMU to speed up the economic recovery, reach sustainable growth and facilitate long-term investments in new technologies and infrastructure.

So it is vital to keep up the political momentum. The Commission is committed to completing all the initiatives that are most relevant for the post-pandemic recovery by the end of 2021.

At the same time, we now need to begin work for more structural issues - such as supervision, insolvency and taxation. We rely on the European Parliament and Member States to push ahead with the Commission's upcoming proposals as quickly as possible.

Staying with taxation, the Commission remains committed to making it fairer for everyone. This is essential for protecting public revenues, which will play an important role for our economic recovery in the short term, and prosperity in the longer term.

Today, ministers discussed extending the EU tax transparency rules to digital platforms and revising the Directive on Administrative Cooperation.

This is an important element of the tax package that the European Commission presented in July. And, in just five months, progress has been quick - for which once again we have to thank the German Presidency. The welcome speed of progress clearly demonstrates the EU's commitment to greater tax transparency and cooperation. 

When the revision comes into effect, those who make money by selling goods or services on digital platforms will also pay their fair share of taxes.

This will not only ensure fair taxation and prevent tax evasion, it will also protect public revenues and support Member States in their economic recovery.

The next step will be to integrate e-money and crypto-assets into this Directive. It will be another step in adapting our rules to new economic realities and business models.

The principles of fair, simple and effective taxation apply beyond Europe too. We still need a global agreement on reforming the international tax system, at the level of the OECD and G20.

The Commission is fully committed to doing so. That means finding a global consensus on how best to tax the digital sector, while targeting tax-avoidance practices and aggressive tax planning.

However, to avoid a patchwork of national systems, if there is no compromise solution by mid-2021, then the European Commissionwill make its own proposal.

To stay on the international theme: I would like to stress the EU's commitment to supporting more vulnerable countries – particularly in Africa - as they battle with the many health, social and economic challenges caused by the pandemic.

The EU is doing its share also here. We are contributing €183 million to the IMF's Catastrophe Containment and Relief Trust. This gives immediate debt relief to the 29 most vulnerable low-income countries, of which 23 are in Africa.

Ministers discussed Council conclusions on debt relief, supporting our work in the G20 to provide much-needed liquidity for low-income countries. For example, further extending the Debt Service Suspension Initiative has provided a good deal of liquidity relief.

But we have to think beyond the short term. The effects of the pandemic will be felt for years to come.

So the G20's agreement on a common framework for debt treatment beyond the Suspension Initiative is particularly welcome. For the first time, it brings together the Paris Club and non-Paris Club creditors – China, in particular - to provide debt relief.

While there is room for improvement, it should be applied as soon as possible.

© European Commission