Debate: European Central Bank – annual report
Date: MONDAY, 8 FEBRUARY 2021
Speaker: Valdis Dombrovskis
Language: EN

The Commission overall agrees with the report. We in particular share the view that the ECB’s independence in conducting monetary policy is vital for safeguarding price stability. Like you we are also concerned about the negative social economic impact of the pandemic. The ECB has used its monetary policy instruments successfully to mitigate those effects. We welcome the emphasis in the report on strong complementarity between fiscal and monetary policies during the crisis. Favourable financing conditions have allowed fiscal impulses to be transmitted across the euro area, and at the same time national liquidity and income support measures have reduced risks of impaired monetary policy transmission. The Commission has supported Member States’ fiscal responses by activating the general escape clause in the Stability and Growth Pact. It will remain active this year. We will review the situation in the spring. We aim to avoid premature withdrawal of fiscal support and plan to strike the right balance between providing the necessary support to the economy and ensuring fiscal sustainability in the medium term. As of this year, the substantial financing provided by the Recovery and Resilience Facility will provide an additional input to our economies. Only the 13% pre—financing amounts to EUR 44 billion. We also need structural reforms to strengthen our growth potential and social cohesion. Next Generation EU will play a key role in making European economies more resilient and better prepared for the green and digital transitions.  In addition, the report makes significant points on climate change. We welcome the ECB’s increasing focus on climate—related risks and the specific ways that have been identified to address them, including under its supervisory and monetary policy mandates. The steps taken by the Commission and the ECB against climate change can certainly reinforce each other. I particularly welcome what Christine Lagarde just mentioned about the ECB investing part of its portfolio in green bonds. I note too that the ECB referred to objectives set out in the EU Taxonomy Regulation, in its decision to accept sustainability—linked bonds as collateral and make them potentially eligible for asset purchases.  The ECB’s preparatory work on a digital euro project is also welcome. By complementing cash, the digital euro could underpin the digitalisation of the EU economy. Taking their respective mandates into account, the Commission and the ECB are together reviewing the broad range of policy, legal and technical questions related to the possible introduction of a digital euro. It goes without saying that the European Parliament will play an important role in this process.  Lastly, the report touches on the issues of the euro’s international role. Promoting a stronger international standing for our common currency is an important element of the Commission strategy to stimulate the openness, strength and resilience of the EU’s economic and financial system. One of its objectives is to support the development of euro—denominated instruments and benchmarks. The euro is already more attractive to investors thanks to euro—denominated bonds issued under SURE and Next Generation EU. Again, I welcome your valuable input on this report and look forward to a good debate.