Remarks by Commissioner Gentiloni at the Eurogroup press conference

I would like to begin by thanking Paschal for the excellent cooperation in preparing the Eurogroup work programme which has been agreed today.

It's an ambitious agenda for the coming nine months, which will be of course a very challenging, indeed crucial period.

We need to steer the European economy through these rough and unchartered waters. That means first and foremost, getting the Recovery and Resilience Facility successfully up and running to help our communities and citizens in need.

But we also need to make decisive progress on more longstanding priorities, notably the strengthening of the banking union and the capital markets union, on which you can count on the very strong support of the Commission.

We also look forward to engaging in the discussions on the international role of the euro and on a digital euro, on which the ECB has just presented an important report.

Implementation of the RRF and orientations for fiscal policy

Concerning the policy priorities for the euro area in preparing the recovery, today we had a constructive discussion on which I would like to make two points.

Firstly, the Commission will present a fully updated set of recommendations for the euro area, as usual, in mid-November. Clearly, several of the recommendations adopted last winter remain overall relevant, even if the economic backdrop has changed. Measures to increase productivity, support the green and digital transition, improve the functioning of labour markets, and to rebalance and deepen our Economic and Monetary Union, as well as a sustained increase in investment, would help to strengthen the recovery.

Secondly, in terms of fiscal policy, we sent a letter last week to EU finance ministers to provide guidance as they are preparing their national budgets for 2021. The General Escape Clause will remain active in the year 2021 and fiscal policies should continue to support the recovery next year, both at the level of the euro area and in individual Member States.

The appropriate fiscal measures to sustain the recovery will need to be carefully chosen. The basic principle, as explained in our letter, is that measures should be well-targeted and temporary. Their use and effectiveness should be regularly reviewed.

There is of course a difference between a fiscal policy aimed at tackling the emergency and one that is focusing on achieving a durable recovery. The relevance of these two types of fiscal policy in 2021 will depend on the trajectory of the virus.

Both can actually co-exist - emergency and recovery - and will probably have to. Because the transition from the pandemic to the post-pandemic phase will not be clear-cut. It will be gradual. Uncertainty is likely to remain high for some time. So agility and flexibility will be key in designing and implementing fiscal policies for and during 2021.

Of course, Next Generation EU will also provide a positive impulse at euro area level and it will increase confidence which is recognised by the financial markets and strongly needed. This is why fully support the efforts of the German Presidency to implement Next Generation EU and we are looking forward to tomorrow's exchange of views on the Recovery and Resilience Facility Regulation.

Greece

Lastly, I presented this afternoon the 7th enhanced surveillance report for Greece.

Our conclusion is Paschal just said is that, given the circumstances, Greece has progressed well with implementing its reform commitments. The pandemic has led to some unavoidable delays with certain actions. But Greece has still made significant progress on a number of major reforms over the past few months. I refer in particular to the overhaul of insolvency legislation; to the introduction of a new short-time work scheme, which will be supported by SURE; and to measures taken in the areas of investment licencing, the energy sector, and public administration.

We will obviously continue engaging closely with the Greek authorities in the coming weeks so that progress can be achieved also in the areas where further work is needed.

And the next enhanced surveillance report is due in November and it will be on the basis of that report that the Eurogroup will decide on the next set of debt measures for Greece.

Thank you.