16 September 2023
Nadia Calviño, the First Vice-President of the Government and Acting Minister for the Economy and Digital Transformation of Spain at the final press conferencia after the Informal Ministerial Meeting on Economic and Financial Affairs (ECOFIN) in Santiago de Compostela. © Pool PEUE/Miguel Toña
In Santiago de Compostela, the EU’s economic and finance ministers (Ecofin) have committed themselves to strengthening the EU’s economic security and strategic autonomy, and to maintain the coordination of fiscal and monetary policy in order to face present and future challenges.
The second day of the informal ministerial meeting on economic and financial affairs, which has brought together delegations from 60 countries, central bank governors, financial supervisory authorities and representatives of multilateral organisations for two days in the City of Culture, began with a breakfast meeting to discuss the ongoing review of fiscal rules.
Formal working sessions were then devoted to the interaction of fiscal and monetary policy, and to strategic autonomy, economic security and European public goods.
The coordination of fiscal and monetary policy has allowed EU economies to be protected during the pandemic and to have a solid recovery, so it remains essential to maintain sustained growth and help reduce inflation, summarised the First Vice-President of the Government of Spain and acting Minister for the Economy and Digital Transformation, Nadia Calviño, at a press conference at the end of the Ecofin meeting.
Ministers also discussed how to protect European public goods and the competitiveness of EU businesses.
Calviño detailed that the talks focused on how to incorporate “elements related to security and strategic autonomy” into economic policy debates at national and European levels in order to face current challenges and boost growth, job creation and the dual green and digital transition.
In this regard, European Commission Vice-President Valdis Dombrovskis commented that diversification is essential, especially in sectors such as energy and commodities, to ensure economic and financial stability.
Nadia Calviño, the First Vice-President of the Government and Acting Minister for the Economy and Digital Transformation of Spain and Valdis Dombrovskis, Executive Vice-President of European Commision, at the final press conference after the Informal Ministerial Meeting on Economic and Financial Affairs (ECOFIN) in Santiago de Compostela. © Pool PEUE/Julio Muñoz
The Spanish presidency of the Council of the EU will also work towards the promotion of an ambitious European strategy to reinforce competitiveness, which is key to intensifying Europe’s strategic autonomy in five areas: energy, agri-food, industry, technology and the digital sphere.
Reform of tax rules
At the breakfast meeting, Calviño reviewed the current state of negotiations for the reform of fiscal rules, which is a priority of the Spanish presidency.
The EU fiscal framework is currently in a transitional phase while negotiations on the reform of the economic governance model are progressing.
Ministers aim to reach an agreement before the end of the year, as the current deficit and debt reduction rules are scheduled to be reactivated in 2024, after being suspended for over three years due to the pandemic and the Ukraine War.
Member States endorsed the roadmap presented by the Spanish presidency to reform fiscal rules at the Ecofin meeting in Brussels last July.
After the meetings held throughout the summer, a technical consensus has been reached on 70% of the text of the new regulation, according to Calviño, and the Spanish presidency considers it necessary to move on to the political negotiation phase.
“There was unanimity on the need to intensify our work in the coming weeks with an ambitious timetable and to work constructively to reach a consensus,” said the Vice-President.
All member states, according to Calviño, have expressed their openness to move on to the political negotiation phase and are committed to reaching the necessary consensus before the end of the year.
For his part, Dombrovskis expressed his support for the Spanish presidency’s efforts to reach a consensus and meet the objective of completing the reform within the set timeframe.
Calviño stressed that the “right balance” must be struck between the sustained reduction of countries’ public debt and the investment and incentives to tackle the necessary structural reforms.
There was unanimity on the need to intensify our work in the coming weeks with an ambitious timetable and to work constructively to reach a consensus
Nadia CalviñoFirst Vice-President of the Government and Acting Minister for the Economy and Digital Transformation of Spain
The four pillars of the roadmap presented by the Spanish presidency for reform are:
- growth-compatible debt reduction benchmarks
- mechanisms to ensure compliance with the rules
- a fiscal framework that allows for the financing of necessary investments
- the role that the different institutions will have in the new framework
The Spanish presidency is therefore seeking a reform that will allow member states to maintain sound public accounts and, at the same time, adequately finance public services and common priorities.
Furthermore, the Vice-President recalled that the new framework must provide room for plans and responses that are adapted to the specificities of each member state, while ensuring common rules to protect equal treatment between countries.
CELAC and Eurogroup meeting
During the first Ecofin working day, ministers expressed their determination to establish a monitoring and follow-up mechanism to successfully implement the Global Gateway Agenda, which foresees 45 billion euros of investment until 2027 to boost the green, digital and social transformation of Latin America and the Caribbean.
For the first time, economy and finance ministers from the EU and the Community of Latin American and Caribbean States (CELAC) met within the framework of the Eurogroup and Ecofin meetings, in an event co-organised by the Spanish presidency and the CAF-Development Bank of Latin America.
The Eurogroup meeting was also held in Santiago, which focused on the medium-term economic outlook, the competitiveness of the eurozone and the sustainability of public finances, as well as analysing the new interest rate rise agreed by the European Central Bank (ECB).
Source – Spanish EU Presidency