Main results of the EU Economic and Financial Affairs Council, 21 January 2025

Thank you very much, Dear Minister.

First, the Polish Council Presidency presented today their policy priorities for the ECOFIN Council.

I welcome, in particular, the important emphasis the work programme places on competitiveness, including a strong focus on simplification, enhancing Europe’s defence position and progressing key legislative files, including the digital euro.

I look forward to working together with you, Minister, and engaging closely with the Polish Presidency to achieve the important milestones included in this presidency programme.

Then, on the implementation of the economic governance framework, today the Council adopted decisions on 21 medium-term fiscal-structural plans based on the Commission’s recommendations of last November.

Last week, the Commission adopted a recommendation for a positive assessment of the Hungarian plan. We invite the ECOFIN Council to adopt its decision at its next meeting in February.

The Council also adopted decisions for the eight Member States under the excessive deficit procedure. These are Belgium, France, Hungary, Italy, Malta, Poland, Slovakia and Romania.

This is a further, important step in the credible implementation of the new economic governance framework.

On France, we welcome that the Council approved a medium-term plan and EDP recommendations that reflects the commitments of the new government. Overall, France maintains their level of ambition over the seven-year period of the medium-term fiscal-structural plan, albeit in a less frontloaded way.

On Austria, the Commission has decided that it will not, at this stage, proceed with a proposal to open an excessive deficit procedure. After having analysed the detailed package of fiscal consolidation measures agreed by the parties currently negotiating to form a government in Austria. However, we will keep monitoring developments and reassess the situation in spring.

All in all, these decisions show that the new economic governance framework is working. Now it is time for implementation.

For all the excessive deficit procedure decisions that are adopted by the Council today, we will do an assessment of effective action on the basis of the information contained in the annual progress reports, which are due by end-April.

Today, I presented the Commission’s proposal for the euro area recommendation and alert mechanism report. We will carry out in-depth reviews for the nine Member States which are already in the macroeconomic imbalances procedure, plus Estonia – linked to cost competitiveness risks.

We also had an opportunity to hold an exchange on simplification, decluttering, and regulatory burden reduction. All these are essential elements for improving competitiveness. In my role as Commissioner for Implementation and Simplification, I am coordinating the Commission’s work on this important priority.

I welcome the broad support we saw from ministers during today’s discussion. The Commission will soon present its first proposals on simplification.

Then the Commission provided our regular update on progress with the implementation of NextGenerationEU and the Recovery and Resilience Facility.

By the end of last year, RRF disbursements crossed the threshold of €300 billion. With €306.1 billion disbursed, we are now close to half, or 47% to be precise, of the total amount of support committed under the RRF.

As we enter the final two years of the RRF, it becomes even more crucial that Member States continue to focus on fully implementing their recovery and resilience plans.

I would like to welcome today’s endorsement of revised plans of Cyprus, Greece and Spain.

We also discussed the situation in Ukraine, with the participation of Ukraine’s finance minister Serhiy Marchenko. Support from Ukraine’s international partners remains vital for Ukraine to withstand the ongoing aggression, maintain macroeconomic stability and continue reconstruction efforts.

The good news is that the Commission disbursed its first tranche of €3 billion under our new €18.1 billion Macro-Financial Assistance instrument. Additional disbursements will continue throughout this year.

Thanks to the EU and G7 partners, the financial needs of Ukraine for this year are covered with the ERA loans initiative, as well as with our Ukraine Facility.

At the same time, we have seen Russia intensify its attacks on the Ukrainian energy sector, entailing serious suffering for the Ukrainian people. This is why the EU allocated new funding of €140 million for humanitarian projects in Ukraine.

Since Russia started its full-scale war against Ukraine in February 2022, Europe has provided nearly €134 billion of support to Ukraine.

Finally, we had a discussion both yesterday evening today on transatlantic relations and engagement with the new Trump administration, where I look forward to working closely with the new Secretary of the Treasury, once confirmed.

In today’s meeting and also yesterday, I think the spirit was very clear: the European Union and the United States share a deep friendship and alliance.

It is also clear to everyone is that the transatlantic relationship is geopolitically crucial.

Therefore, it is very important to do our very best to build strong and balanced economic relations with the new US Administration from the very beginning.

While we note that the new US President has, at this stage, not announced any new tariffs, maybe contrary to expectations, certainly trade relations are very important between the EU and the US.

As President Von Der Leyen pointed out earlier today in Davos, no other economies in the world are as integrated as the EU and US.

The volume between us is worth €1.5 trillion, representing 30% of global trade. Two thirds of all American assets abroad are in Europe and the US provides over half of our LNG. And I could go on on this.

So, there is a lot at stake both economically and geopolitically.

Then the Commission has taken note of the Presidential Memorandum on the OECD Global Tax Deal. We remain committed to our international obligations undertaken over the last years and open to a meaningful dialogue with our international partners.

While the Commission regrets the content of the Memorandum, we trust that it is worth taking the time to discuss these matters with the new US Tax Administration in order to better understand their asks and also explain our position.

To summarise, the EU is committed to fostering a stable, balanced, and predictable economic and trade partnership with the US. We will be pragmatic, but we will also be ready to stand up for our principles, protect our interests and uphold our values, if necessary.

Thank you.

Source – EU Commission