Brussels, 16 May 2023
Thank you minister. Good afternoon, everyone.
I will start with sanctions, where the EU has been part of the global response to condemn Russia in its continued illegal aggression against Ukraine.
The effectiveness of sanctions depends on how well they are enforced. Cracking down on circumvention is the focus of the 11th sanctions package proposed by the Commission.
Dodging sanctions reduces their impact on Russia and its war machine. It also distorts the EU’s own internal market by creating unfair competition.
Member States have recently started to finalise the first enforcement cases for violations of the broad measures adopted in 2022.
This issue affects non-EU countries as well, where customs data has revealed a number of anomalous trade flows concerning sanctioned goods.
These relate to EU exports to certain countries in Russia’s neighbourhood, particularly those in the Eurasian Economic Union, and to some other countries outside the European Union that are not aligned with EU sanctions either.
We have asked the countries concerned to explain the abnormal flows and take strong action to stop them.
Turning to the economy: yesterday, the European Commission issued its spring forecast, which upgrades the EU’s growth outlook to 1.0% this year.
The EU’s economy is holding up remarkably well in a very challenging global context.
Energy prices have fallen significantly and returned to their 2021 levels. In addition, a very strong labour market has helped to strengthen economic resilience.
However, this more promising outlook comes with risks. Core inflation remains persistently high.
This could further erode people’s purchasing power, slow investment growth and impede access to credit.
To keep inflation in check, we need to make sure that fiscal policy remains prudent. And, of course, it is vital to maintain the momentum of reforms and investments set out in national Recovery and Resilience Plans.
As regards the Recovery and Resilience Facility, it is crucial that the plans’ implementation continues to move forward quickly and smoothly.
All measures need to be implemented by 2026.
Several countries have submitted their revised plans with additional REPowerEU chapters, which are now being assessed. The Commission has also received notification by Member States of their intention to request additional RRF loans amounting to €148 billion.
Each country concerned should follow up with a formal loan request by the end of August, along with a revised RRP containing more reforms and investments – and justifying the higher financing needs.
If all the requests materialise in full, this would leave around €80 billion of loans still available.
On taxation: as the minister said, today’s Ecofin reached a political agreement on amending the Directive on Administrative Cooperation – part of the EU’s agenda for fair and effective taxation.
Alternative means of payment and investment such as crypto-assets and e-money are a new reality in the digital age. They have changed the world of payments and investment.
However, while they have great potential to drive economic activity and innovation, they also carry risks of reducing transparency and enabling tax evasion or fraud.
In addition, national tax authorities are not always able to track the significant proceeds made from using crypto-assets, which are easily and anonymously traded across borders.
It means that tax is not being paid effectively, which means a loss in tax revenues that could be used for the public good.
With today’s agreement, crypto-asset service providers will need to report domestic as well as cross-border transactions of clients residing in the EU.
Member States will get the information required to make sure that taxes are paid on gains made in trading or investing in crypto-assets, as they would be for any other financial assets.
Lastly, on banking.
We started the journey towards the Banking Union more than a decade ago. All in all, we have been successful.
The EU banking sector is strong and in good shape.
It has built up its resilience substantially.
The EU system works well, with strong rules that allow national authorities to handle bank crises effectively.
But we can make it better, and recent events in the global banking sector also demonstrate that we can never allow ourselves to be complacent.
We have seen failing medium-sized and smaller banks mainly being managed under national systems, where authorities use taxpayers’ money to deal with a looming failure – instead of banks’ internal own resources and industry-funded safety nets.
So we want to broaden the scope of European-level resolution.
Ministers held a first debate on the Commission’s proposals to make sure that all failing banks can be handled more effectively and coherently, should the need arise.
Here, our principles are unchanged, to: preserve financial stability, protect taxpayers’ money and improve depositor confidence.
Our reform aims to improve crisis management for banks and also represents an important step towards finalising the Banking Union. Thank you.