During the plenary session of the European Parliament in Brussels (08-11 March 2021), MEPs debate on the tackling the economic impact of the COVID pandemic by focusing on investment, competitiveness and skills.Opening statement by Paolo GENTILONI, European Commissioner for Economy. This transcription speech is the result of an automatic process. Check against delivery.

Brussels

statement

debate

plenary session

GENTILONI, Paolo (IT, EC)

healthcare safety (T)

Coronavirus outbreak (T)

economic situation in Europe (T)

Tackling the economic impact of the COVID pandemic by focusing on investment, competitiveness and skills: opening statement by Paolo GENTILONI, European Commissioner for Economy

SOUNDBITE (Original), Paolo GENTILONI, European Commissioner for Economy, Thank you, Madam President. Honourable members. Our economy is expected to have handed 2020 and started the New Year on a weak footing. This morning, Eurostat confirmed the last quarter of 2020 with a negative growth of zero point seven in the euro area. But we still expect growth to resume this spring and gather momentum in the summer. So there is hope on the horizon, the famous light ahead of the famous tunnel. But for now, the pandemic continues to hurt people's livelihoods and the wider economy. And in this context, our first thoughts should go to the victims of the virus, to their families and loved ones in my own country.

SOUNDBITE (Original), Paolo GENTILONI, European Commissioner for Economy, In my own country, yesterday, a very terrible milestone was reached with 100000 victims, the negative impact on the economy and we will have to be aware and even proud of this would have been much bigger without fast and decisive EU and national action. Our decision last March to activate the general escape clause was a recognition of the gravity of the unfolding crisis, together with the decision to adopt a temporary framework for state aid rules and together with the decisions taken by the ECB, these institutions reaction enabled member states to deliver an unprecedented fiscal policy response.

SOUNDBITE (Original), Paolo GENTILONI, European Commissioner for Economy, Total direct fiscal support amounted to around eight percent of GDP in 2020. In the EU, together with additional liquidity support measures, it is estimated to have cushioned the contraction in GDP in 2020 by around 4.5 Percentage points. A national and common fiscal response go hand in hand. I think we should consider them together. We when we, for example, make a comparison with what happens in America, in US, we should consider the two parallel track of the European reaction. We are not a federal state. We have to combine and make national and common reaction go together. I telling this because today probably the US House will finally approve the one point nine trillion stimulus package of the new US administration. This would have will have also a very positive impact in our economy.

SOUNDBITE (Original), Paolo GENTILONI, European Commissioner for Economy, But all in all, I think we have to consider the whole reaction and not only our common tools, vital liquidity, vital liquidity support made possible by the temporary framework for state aid prevented liquidity shortages from turning into a solvency problem. And we would have had solvency problems without this extraordinary authorised state aid. And we had the contrary. We had the lowest level of bankruptcies since many years in 2020. Now our message is clear to further cushion the impact of the crisis.

SOUNDBITE (Original), Paolo GENTILONI, European Commissioner for Economy,Fiscal support should continue as long as needed. And it is the same message which comes from multilateral fora such as the G7 and the G20 and by key international partners. We must ensure that we don't repeat the mistakes of a decade ago by pulling back support too soon. And so for 2022, it is clear that fiscal support will still be necessary. Better doing too much rather than too little, based on current indications that general escape clause would remain active in 2022 and be deactivated in 2023.

SOUNDBITE (Original), Paolo GENTILONI, European Commissioner for Economy, I think conditions out there for a strong recovery. Again today, OECD confirmed in their forecast a growth for 2021 of three point nine percent and for 2022 of three point eight percent, very near to the Commission forecast presented one month ago. This is a strong economic growth for an economic area as we are. So we will face the crisis. We are still five points behind what we wear at the end of 2019, but we have all conditions for a strong recovery in the next couple of years beginning this summer.

SOUNDBITE (Original), Paolo GENTILONI, European Commissioner for Economy, Fiscal policy then should be differentiated according to the pace of each country's recovery and the underlying fiscal situation. Timely, temporary and targeted measures will allow us more to return to sustainable budgets in the medium term, ensuring debt sustainability while also enhancing investment. Finally, a few remarks on our common EU tools. Of course, the RRF is a game changer. The effective implementation can deliver up to two percent of additional GDP by 2024 and create two million jobs, including by accelerating the green and digital transition. It is vital that we make use of this opportunity to increase both the level and the quality of our invest.

SOUNDBITE (Original), Paolo GENTILONI, European Commissioner for Economy, Invest EU is another critical tool. We discussed this morning, and I think that also, thanks to the strong support of the parliament, this tool will also help to crowd private investment for the transition. The sure instrument has proven very popular. We have already proposed over 90 billion of support out of a total envelope of 100 billion and 19 member states asked for this support despite the very low interest rate environment we are in. Finally, the ease effective active support to employment is also a new and important tool. It provides guidance for member states to accompany labour market transitions from decline into expanding sectors including green and digital, anticipating change and assisting workers affected by restructuring processes.

SOUNDBITE (Original), Paolo GENTILONI, European Commissioner for Economy, So, ladies and gentlemen, honourable members, with the economic outlook surrounded by uncertainty, we must deliver on all these fronts. To make sure the recovery takes hold on, our economy is emerge, renewed and more resilient from the crisis, stronger for the twin transition should equip our economy for the present and for the future. Fairer because no one should be left behind. Thank you.