Remarks by Executive Vice-President Valdis Dombrovskis at Die Welt Economic Summit

Met dank overgenomen van Europese Commissie (EC) i, gepubliceerd op woensdag 8 januari 2020.

Sehr geehrte Damen und Herren, sehr geehrter Herr Doepfner,

Es freut mich sehr, hier zu Gast zu sein, bei einer Zeitung die ich sehr schätze und gerne lese.

Die Welt und die Welt am Sonntag sind mit zwei Korrespondenten in Brüssel schon gut vertreten.

Aber schicken Sie ruhig noch eine oder einen mehr nach Brüssel - was dort vorgeht, ist für die Menschen in Deutschland mindestens ebenso relevant wie manche Debatten in der Innenpolitik.

WELT-Journalisten kennen den Wert des transatlantischen Bündnisses und die sicherheitspolitische Verantwortung Deutschlands.

Gegenüber der russischen Aggression in der Ukraine haben Ihre Zeitungen eine klare Haltung, ebenso zur Verantwortung der NATO i zur Sicherung ihrer Ostflanke.

Das ist gerade uns Balten wichtig.

Ladies and gentlemen: I will now continue in English.

During this year, we will be called on to manage many uncertainties: geopolitical, economic, social and environmental.

We will later discuss the dramatic escalation of tensions between the US and Iran, which must be stopped before spiralling further. And there are wider tensions in the Middle East too.

We have a presidential election coming up in the United States.

Trade tensions continue and the future of the World Trade Organization hangs in the balance after its top court shut down.

Closer to home, the UK is about to leave the European Union.

The world is undergoing changes of a magnitude that will have a profound impact on Europe's position in the international arena.

The O.E.C.D recently summed up the prevailing mood among economists: “Warning: low growth ahead”.

But change also brings opportunities.

Europe is changing gear for 2020. A new European Commission and a new ECB president recently took office. And let's not forget that Germany will take over the EU presidency from July.

I believe that we have the determination, talent and ideas to tackle these challenges head-on and to do the best for all Europeans: for people and business.

The 2008 economic and financial crisis taught us some hard lessons.

Regulation overhaul has brought stability and confidence to our wider financial system, and to the euro. We are enjoying seven years of uninterrupted growth.

Domestic demand is holding up well, helped by strong labour markets and record employment numbers.

The fiscal positions of European countries have improved.

And surveys show that the euro has never been more popular among the public than it is today.

Yes, we weathered the storm. But I think everyone here this evening is aware of the risk of inaction and poor fiscal coordination.

While Europe's economy is now much stronger and more resilient than before the crisis, there are clouds on the horizon.

Manufacturing has slowed down, partly as a result of trade tensions. This has an especially negative impact on export-oriented economies with a strong manufacturing base - like Germany.

The possible prospect of the US imposing restrictions on cars will be just one of Germany's economic concerns for the New Year.

As I look around this room, I am delighted to see so many representatives of German industry, business and media here this evening. You will know better than anyone that Germany is not immune to the effects of crisis contagion and wider instability.

The Commission's autumn economic forecast sees only modest growth for Germany.

After expanding for nine years, GDP is expected to rise by 0.4% in 2019, and by just 1% in 2020 and 2021.

That is despite your strong economic performance over the past decade, healthy public and private balance sheets, and unemployment at a record low.

Ladies and Gentlemen,

Today's more uncertain world has brought a series of new challenges right to our doorstep.

We all have seen the raging fires engulfing parts of Australia, the latest devastating evidence of how climate change is affecting our lives and our natural habitat.

We face other tectonic shifts too: digitalisation and new technologies, demographic changes - especially ageing populations.

All these developments will profoundly transform our economies and societies.

They need to be managed effectively and fairly so that the economy works for people. My new job title, in fact.

Goethe famously said: “Denke nicht in Problemen. Denke in Lösungen”. And we have done so.

As Commission Executive Vice-President, my aim over the next five years will be for Europe to achieve sustainable and inclusive economic growth.

We plan to:

  • strengthen Europe's economic sovereignty at this time of global uncertainty;
  • use EU economic and industrial policies to support the green and digital transformations;
  • and accompany these transformations with effective social policies to build a more inclusive society.

Last month, we proposed a Green Deal i for Europe to become a climate-neutral economy by 2050.

It makes sure sustainability will be the green thread running through all policy areas. It is our contribution to forming a Global Green Deal.

Our goal is to help boost investment in the most competitive technologies and also give Europeans a better quality of life.

To stimulate finance for sustainable projects, we have created a completely new body of EU law.

Just three weeks ago, we reached political agreement on the EU's ‘green list' classification system - or taxonomy - to define which economic activities are sustainable.

As part of our Action Plan on Sustainable Finance, we also secured EU agreement for disclosure rules for financial market operators, and climate benchmarks. They are already having a positive impact on the market.

These policy tools are needed to generate the extra 260 billion euros a year we need to meet the Paris targets - and to channel finance towards everything from low-carbon transport systems to clean infrastructure projects.

Next week, we will present our Sustainable Europe Investment Plan to unlock €1 trillion euros of sustainable investment over the next decade.

Parts of the European Investment Bank will become our Climate Bank. By 2025, at least half of its financing will be dedicated to climate action projects - double what it is today.

In order to guide investors towards sustainable investment and steer changes in how companies and households behave, we need the right policy environment.

We will consult widely and then present a renewed sustainable financing strategy later this year. It will go hand in hand with a new set of green finance initiatives.

Let us remember though, that the Green Deal will not succeed without a thriving economy.

For that, Europe's companies - such as all those represented here this evening - should be able to flourish and prosper.

In fact, we need Germany fully on board for wider economic reforms that will preserve Europe's productivity and competitiveness.

Here, longer-term political stability will be paramount. Political stability is the bedrock that countries need to thrive, to develop coherent policy programmes to address challenges that we face.

Europe has been a global industrial leader for many decades.

We want to keep it that way.

I will work with Commission colleagues to develop a long-term strategy to ensure that Europe remains a top industrial power.

However, green is not the only major transformation underway.

Given the huge potential that new technologies bring to the financial sector, technical innovation and the digitalisation of financial services are a priority.

We will present a European strategy to make the most of FinTech and compete globally, removing more regulatory barriers between countries.

Crowdfunding and instant payments are good examples. With FinTech startups - such as those flourishing in Berlin - we can make it easier for them to scale up by facilitating their cross-border activities.

Given the likely impact of the green and digital transformations, we need to preserve Europe's unique social market economy model.

We must not worsen the existing inequalities of income and opportunity. We need to reduce them.

The new Just Transition Mechanism will support those most affected by the green transformation.

It will focus on people and regions that rely on fossil fuels or carbon-intensive processes - those living in coal regions in transition, for example.

Ladies and gentlemen,

I have mentioned the EU economy a lot this evening. It is a powerful force in the world, and greatly supported by our largest asset: the single market.

However, I cannot see Europe playing a successful key role on the world financial scene without further deepening the Economic and Monetary Union.

This remains a top priority.

The EMU project has advanced a good deal in the last five years.

But it needs more reform, so that the EU can project its economic weight and affirm its economic sovereignty. For this, we need strong national economies.

They are meant to build fiscal buffers in good times for later use when the economy slows down.

It is why we advise Euro area countries to apply differentiated fiscal policies. High-debt countries should bring it down, whereas countries with fiscal space should use it to stimulate the economy.

Germany is one of the countries where the economic slowdown is most pronounced.

So it's reassuring to see Germany using some of its fiscal space to support investment.

I also want to strengthen the international role of the euro.

Around 60 countries either use the euro or link their currency with it.

It is a major strategic asset, and arguably the most emblematic achievement of economic policy-making in the EU's history.

The euro is consistently the second most used currency, in payments and in global reserves. I want to see it used more in both areas, and for issuing bonds.

Economic strength also depends on a strong financial system. For that, a deep and liquid European capital market is vital.

This brings me to the Capital Markets Union, where we will have to push further. That - by the way - goes for the Banking Union too, which we should now complete.

We have made a lot of progress with the CMU, reaching agreement on 12 of the 13 proposals presented by the Commission. The basic building blocks are in place - but there is much more to do.

I aim to speed up the work to diversify sources of finance for companies and tackle barriers to capital flows.

That will be especially important for the many millions of small and medium enterprises in the EU.

With their innovative capacity and talent, SMEs are vital for Europe's economy - and there's no better example than the Mittelstand, the motor of the German economy.

All too often, however, European SMEs move abroad to scale up.

Why does this happen?

One reason is that they find it hard to get access to market-based financing in Europe. So I will propose a new fund to help our SMEs go public.

Then, with my colleagues, I will propose a strategy to help SMEs tackle challenges relating to the green transition, digitalisation and changing trade patterns.

Ladies and gentlemen

You can see that we have a lot of work to do. Some of it will break new legal ground.

To me, one thing is clear.

The current geopolitical context shows that peace, stability and prosperity - the notions that are at the very heart of the European project - can no longer be taken for granted.

No individual Member State can tackle these challenges alone. The European Union is stronger when we work together.

That's why we need your engagement, your leadership and vision so that the European Union remains a powerful and inspiring global player in a fast changing world.

Vielen Dank.