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“We will do everything to avoid permanent scars on our economies”

Informal Video conference of Economic and Finance Ministers (ECOFIN)

16 Mar · 13h15

© Portuguese Presidency of the Council of the European Union 2021 / Pedro Sá da Bandeira

In the past year, which has been marked by the pandemic, budgetary policy has been an essential mechanism in the endeavour to protect families and keep businesses alive, and this should continue, according to the European Union Ministers for Finance and the Economy, who took part in an ECOFIN meeting this morning.

 

As the vaccination campaigns move ahead in the different Member States, it is expected that the second half of the year will see European economies recover. For 2022, it is also hoped that growth will be “robust”, allowing the GDP of the European Union to regain the level registered in 2019. These were the ideas of the Portuguese Minister of State for Finance, João Leão. He underscored, however, that our return to this level “is not equivalent to recovering the growth trajectory that we enjoyed before the pandemic”. Furthermore, he stressed “the need, once again, to maintain policies that promote growth”.

“ The consensus is that we cannot take the risk of prematurely withdrawing support for the economy. If we fail to support the most vulnerable sectors, we run the risk of a temporary crisis leaving permanent scars on our economy. This is a scenario we will do everything to avoid ”

João Leão, Minister of State for Finance

Today, on the basis of the European Commission’s guidelines on retention of the general escape clause in 2022, the Ministers began to discuss the suspension of budgetary rules for another year.

“ If the budgetary rules are suspended, we can concentrate on economic recovery, applying temporary measures that do not jeopardise the medium-term sustainability of the public finances,” the Portuguese Minister stated ”

João Leão, Minister of State for Finance

Discussion on the suspension of the general escape clause should resume shortly.

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João Leão, Minister of State for Finance © Portuguese Presidency of the Council of the European Union 2021 / Pedro Sá da Bandeira

Quality should be allied with speed in the Recovery and Resilience Plans

Today, at the suggestion of the Portuguese Presidency, Ministers took stock of the situation regarding the National Recovery and Resilience Plans. “We discussed common challenges so as to guarantee that quality remains allied with speed in this process,” João Leão explained. At this point, when ten Member States have ratified the Own Resources Decision, the Minister added that the aim is for the remainder to do so as soon as possible, so that this process may be completed by April.

 

The Ministers also discussed the deliberations being carried out in the area of taxation of the digital economy. The technical work, for which the OECD is responsible, is well advanced and the Council continues to accompany and contribute to the negotiations.

 

"The Member States agree that it is in their interest to give room to the negotiations in progress at the OECD. The route to follow is to reach an overall consensus, in a multilateral context. We also confirmed our willingness to find a European solution, in the absence of progress in the conversations at OECD level,” João Leão declared.