At today’s ECOFIN meeting, at which Greece was represented by the Minister of National Economy and Finance Kostis Hatzidakis, executive decisions on amendments to the Recovery Fund of Greece, Finland, Germany, Poland, Finland, Poland and Cyprus were approved. Regarding the implementation of the Recovery Fund, it was recorded that Greece has already received €14.9 billion (€7.6 billion in grants and €7.3 billion in loans), consistently ranking among the first in the EU in terms of absorption. Also in the coming months, the EU is expected to disburse €3.3 billion of the 4th payment request (€998.6 million in grants and €2.3 billion in loans). Therefore, the total liquidity from Recovery Fund resources will amount to €18.2 billion more than half of the total available budget.
The ECOFIN also adopted the Country Specific Recommendations and conclusions on the In Depth Reviews 2024, carried out in the context of the European Semester. It is worth noting that based on the latest spring forecasts of the European Commission, public debt in the EU is still almost 4 percentage points above its pre-pandemic level (from 77.8 in 2019 to 81.7 in 2023) while in Greece it has decreased from 180.6% in 2019 to 161.9% in 2023, i.e. by 18.7 percentage points.
Yesterday, during the Eurogroup discussion on the so-called Letta report on the single European market, Hatzidakis noted that “if Europe wants more investment, it must have correspondingly high ambitions. It should not just stick to declarations and reports. As long as we delay, this is to our detriment”.
In the debate on this issue, former Italian Prime Minister Enrico Letta presented the main conclusions of his recent report on the future of the common market. In his intervention, Mr Hatzidakis focused on the need to stimulate both private and public investment and outlined the main parameters that can contribute to this objective:
– Promoting the integration of capital markets towards the creation of a true Savings and Investment Union – as proposed by the Letta report.
– Completion of the Banking Union, with a deposit guarantee at European level, which will contribute directly and indirectly to boosting private investment.
– European public procurement policy, where possible, building on the recent joint procurement of vaccines and gas. This policy will reduce costs and strengthen the dynamism of the European economy.
– Further use and development of the Major Projects of Common European Interest initiative to support the financing of investments in strategic sectors such as the creation of energy networks, in particular electricity, and defence (e.g. the European air defence system). It should be noted here that the creation of trans-European electricity networks will help to reduce electricity prices.
– More active participation of national pension funds in capital markets to improve the use of their assets, with the necessary guarantees of good governance and sustainability, of course.
– Investment in human capital to facilitate the diffusion of new knowledge and technologies, a key prerequisite for enhancing competitiveness.
The meeting adopted a joint Eurogroup statement on the fiscal orientation of the euro area, which stressed that the necessary consolidation of member states’ public finances should be done in a way that does not harm growth, while enhancing productivity and maintaining or increasing investment, which remains essential for a competitive, dynamic and resilient economy. In his intervention, Hatzidakis said that Greece agrees with the content of the joint statement, which is balanced, noting that no one disputes the need for a serious fiscal policy, but care should be taken to avoid “excessive adjustment” which will ultimately harm the economy, underlining the particular importance of investment.
In the discussion on the functioning of the European Exchange Rate Mechanism, it was noted that Bulgaria has made significant progress in meeting the euro area membership criteria, but the level of inflation remains relatively high, together also with transparency-related issues. In his intervention, Hatzidakis noted the effort made by the Bulgarian government and called for this effort to be judged in a fair manner.
During today’s ECOFIN discussion all Finance Ministers who took the floor, including Mr. Hadjidakis and Cypriot Minister Keravnos reminded the Hungarian Presidency that Ukraine should remain on its priorities, while condemning the Russian invasion.
