Remarks by Commissioner Gentiloni at the Eurogroup press conference

Good evening.

The discussion on the economic outlook confirmed that we are in a situation where growth is strongly going on in the Union and the level of confidence also in the last two quarters has remained very high.

The latest indicators of economic sentiment that we released were close to their highest level of all time.

There were many voices around the table highlighting the crucial role that the unprecedented policy response that we gave played in this recovery. Very proud voices around the table.

It's a response that has been both strong - big fiscal firepower - and complementary, between national and European measures and between monetary, fiscal and regulatory policies.

We also discussed the headwinds facing the recovery.

First, still the pandemic: a few ministers recalled that we still have to consider the pandemic as one of the main, and maybe the main downside risk. Despite the success of the vaccination campaign.

Second, the disruptions in global supply chains.

And third, the rise in inflation, which is primarily but not exclusively driven by energy price increases.

Our analysis, which I would say is widely shared, points to these headwinds of the global supply chains and inflation as mostly temporary.

But at the same time, it is clear that as Paschal said, we are in an unusually complex situation.

It is clear that we should remain highly vigilant and ready to adapt our response as the situation develops.

I will address all of these topics in depth when I present the Commission's Autumn Economic Forecast on Thursday at 11am.

On the economic governance review we had a first discussion today after the Communication of the Commission.

In the Communication we concentrated on some elements:

First, how to facilitate the massive investments that we need. In particular, just to give one figure, we estimate the additional investment needs for the green transition at 520 billion euros per year for the next ten years.

Second, how to deliver a credible reduction in public debt ratios without choking off the recovery, so how to find a balance between need of debt reduction and the need to support the recovery and stable growth.

And finally how to make our framework simpler, which is simple to say but not so simple to achieve. It's quite an issue to make our framework simpler but several minsters around the table stressed the importance of this.

In addition to these, I would mention two further elements that are of particular relevance for the euro area:

First, the interplay between monetary and fiscal policy. The response to the pandemic showed the importance of countercyclical fiscal policy, especially with interest rates at the lower bound as they are.

Second, the question of how to improve our framework for detecting and correcting macroeconomic imbalances, which is particularly relevant in the euro area.

So reaching a consensus on the fiscal and economic framework in the post-COVID era is crucial for the future of the euro, but of course also for the EU as whole.

And this was clearly shared in the format of the Eurogroup in inclusive form that we had today.

I'd like to avoid that this review be seen as just another chapter in a very long book of debates on the Stability and Growth Pact, in which established positions are stated and restated.

I think on the contrary that it should be seen as the first chapter in a new story, which is about creating the conditions for strong, sustainable growth for the European Union after the COVID crisis and with the enormous transformation and transition that we have to address.

Today we had a start. I think it was a good start. But of course we have to work a lot to build a consensus on these proposals that we will put on the table in the first next semester of next year.