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At a recent Eurogroup meeting, Commissioner Dombrovskis informed about the outcomes of some international meetings, e.g. the IMF and G7, where the focus was on the international economic situation, the impact of US tariffs on the EU, etc. Besides, during the ECOFIN meeting, there were some vital outcomes important for the member states’ economy and finances.
EU’s economy in the world
The EU institutions remain fully committed to finding a negotiated solution with the US, while advancing cooperation with the member states to prepare possible countermeasures should this be necessary. Despite the challenges, it is important he noted “that this period of uncertainty also gives rise to opportunities for Europe”.
Among the challenges and opportunities, the Commissioner also mentioned the following:
= First, using predictability as a strength: in times of turmoil, the EU’s fundamental values and democratic processes become Europe’s assets.
= Second, closer cooperation and acting together on security and defence: the EU’s ReArm Europe Plan/Readiness 2030 initiative aims to unlock €800 billion in additional defense spending; which is a “game-changer for Europe’s security”, he added.
= Third, investing in the European main economic asset, the Single Market of 450 million consumers: the EU is taking extensive action to tear down remaining barriers to boost the EU’s competitiveness, while attracting global talent and investment.
= Fourth, cutting red tape to boost European competitiveness: the Commission is delivering on a simplification agenda that seeks to ensure that the EU rules and regulations help to deliver, rather than impede, the achievement of the EU-wide economic, social and environmental goals.
= Fifth, expanding the EU network of partnerships across the world: the Commission is determined to seal new global partnerships to diversify and strengthen European economic security.
All mentioned actions are aimed at “making the most of this window of opportunity by enhancing our competitiveness”, he said and added that the EU can act as “both a safe haven for global investors in the short term and also increase its attraction as a destination for investment in the longer term”.
As to the digital euro, the Commission has held positive discussions on progress with advancing in this direction; there is a broad agreement among the member states’ ministers that the digital euro represents an important opportunity for the European common currency “to embrace the digital age and make the most of the opportunities that it offers”. The Commission has emphasized that it is important presently “to really make progress on the negotiations” concerning the legal aspects of digital euro and then advance with the practical preparations. Recent geopolitical developments have also underlined the urgency of making progress on the introduction of the digital euro: thus, these efforts could form “an important pillar in strengthening the EU’s strategic autonomy and resilience”.
“In today’s more complicated and conflicting world, the digital euro can be a cornerstone of a competitive, resilient and truly European retail payment system” the Commissioner concluded.
Source and citation from: https://ec.europa.eu/commission/presscorner/detail/en/speech_25_1199
More on EU economy and euro in: https://ec.europa.eu/commission/presscorner/home/en#news-block
Economic and financial issues
Commissioner Dombrovskis also made some comments on the outcomes of the recent ECOFIN agenda; the Commission will come forward soon with the detailed projections for the EU economy in the Spring Economic Forecast.
Although, he said “the EU economy ended 2024 on a slightly stronger footing than expected and maintained its momentum at the beginning of the year”, at the same time, it was clear that “the US tariff announcements and the uncertainty they have ushered” have negatively affected the EU’s growth and investment outlook for this year. It means that the EU institutions and the member states shall remain focused on taking urgent action to improve competitiveness and secure the EU-wide long-term prosperity. Besides, the Commission also provided its regular update on progress with the implementation of the Recovery and Resilience Facility.
As to the financial support: a total of €311.4 billion has been already disbursed, and the Commission is currently assessing 17 payment requests amounting to a total of €62.2 billion, covering 613 milestones and targets (the Commission reminded the states governance that the legal deadline for all milestones and targets was the end of August 2026; this means that there are some 15 months left to submit all outstanding payment requests and supporting evidence.
The Commissioner also highlighted two key points at the recent ECOFIN meeting: firstly, the need to accelerate implementation efforts and meet the set timelines to submit payment requests and produce the relevant evidence; secondly, the member states need to urgently review their plans and remove any measures that are no longer feasible before the RRF legal deadline; finally, the Commission welcomed the endorsement of the targeted revision of the Dutch, Slovak, Spanish, and Portuguese recovery and resilience plans.
Within the regular exchange on the latest developments related to Russia’s full-scale invasion of Ukraine, the discussion focused on the situation of the Russian economy, with a presentation from the Stockholm Institute of Transition Economics (SITE). Their analysis highlights the unreliability of Russian statistics and that the Russian economy is not performing as well as its official statistics suggest; hence, the Commission broadly agrees with this analysis and the overall increasing fragility of the Russian economy. “This underlines the importance of the international community’s ongoing efforts to limit the Kremlin’s capacity to continue its war of aggression against Ukraine”, noted the Commissioner and added that the Commission disbursed a further €1 billion under the G7 Extraordinary Revenue Acceleration initiative. These loans are to be repaid with proceeds from immobilized Russian State assets in the EU, meaning that Russia will pay for the destruction it is causing in Ukraine.
As to the EU’s policy debate on SAFE, the new funding “instrument” that will provide up to €150 billion for defense investments; in short, there remains very broad agreement on the need for Europe to take on more responsibility for its defense and security. SAFE is an essential element of facilitating the investment needed to make this happen; with SAFE the member states can spend more, faster and better, together with the European partners if the required conditions are met.
Finally, the annual Economic and Financial Dialogue with Regional Partners which took place at the ECOFIN meeting also mentioned that it was important for the EU to continue building win-win partnerships around the world. Hence, the meeting was an important opportunity to engage with partners on how the EU and partners can work to improve the competitiveness of Europe as a continent and in the regions in view of recent geopolitical changes.
More in: https://ec.europa.eu/commission/presscorner/detail/en/speech_25_1204