Good evening. We know that the fallout of the war of aggression is leading to a very complex situation.
We had a strong first half of the year. And then since three months, we have a fall in business and consumer confidence. The fall in confidence has mirrored the rise in inflation. You know that we have now a record high of 10% in the euro area last month. The good news is that the labour market has remained remarkably strong.
In this difficult situation, I think that the statement issued this evening as Paschal just said sets out very clearly the Eurogroup’s views on how we should collectively move forward.
Let me just make three points that I believe are key in this situation.
First, fiscal policy needs to complement, not complicate, monetary policy. That means ensuring that measures taken to address the energy crisis are ambitious, yes, but above all well-designed – so that they do not actually add to inflationary pressures.
Second, and this builds on the previous point, support should be temporary and targeted at vulnerable households and firms. This is a mantra from the European Commission, not new for you, but I think the message needs to be reiterated.
Third, actions taken at national level have important spillovers on other Member States, so a coordinated approach at the European level is more crucial than ever. We need as the statement says to respond collectively to the current challenges, and let me say, in a spirit of solidarity and unity, we were able to avoid the risk of fragmentation in the darkest weeks of the pandemic and we must do the same today.
This brings me to the second point, on how the Recovery and Resilience Facility ties into the implementation of our euro area recommendations.
You know that the Facility was designed with three objectives in mind: stabilisation in the face of the pandemic; kick-starting the recovery; and enhancing the EU’s economic resilience. I think the RRF has helped to avoid lasting economic divergences between euro area Member States.
It remains the strongest tool of common action that we have. That is why we must continue to effectively implement it – reforms and investments – and make use of the remaining loans available in order to speed up the green transition, in line with the REPowerEU objectives. And for this reason, also the Commission supports the Czech Presidency’s efforts to find tomorrow an agreement on REPowerEU. For this reason, we have to implement these plans. While we can be open to discussing limited and specific points, there should be in our view no wholesale reopening of plans or postponing of key commitments.
On the digital euro, we discussed public and private cooperation in the distribution of a digital euro and looked at how private intermediaries and the Eurosystem should work together.
The Commission is continuing preparations for a legislative proposal to establish a digital euro and we look forward to continuing discussions ahead of that proposal which we are planning to adopt next year.
Last but not least, we have both a happy and a sad occasion to mark today and both relate to Klaus.
The happy occasion is that it is his birthday. Auguri. The sad occasion is that this is the last time that we share this podium together since his long reign as Managing Director of the ESM is coming to an end this week.
As we say farewell to Klaus, the Eurogroup also says farewell to a part of its institutional work, since Klaus has participated in these meetings not only since the establishment of the EFSF, but for many years previously as Director General of DG ECFIN. Indeed, he told us this evening, he sat in the Eurogroup before it was even called the Eurogroup.
Klaus, you have played a tremendously important role in the establishment and development of the euro. We will continue to cooperate in some form in the coming weeks and months.
And as today is also German Unity Day, let me conclude by wishing you Viel Spaß und viel Glück!