Executive Vice-President-designate Valdis Dombrovskis on Tuesday 8 October justified the intuition of the President-elect of the European Commission, Ursula von der Leyen, who placed the Latvian Christian Democrat in the same hierarchical rank as the Dutch socialist Frans Timmermans and the Danish liberal Margrethe Vestager in the future College of European Commissioners (see EUROPE 12324/1).
In a speech to the European Parliament's Committees on Economic and Monetary Affairs (ECON), Employment and Social Affairs (EMPL) and Budgets (BUDG), Mr Dombrovskis promised to work to ensure that the European Union's economy serves its citizens and enables them to face the combined challenges of climate change and the digital transition.
A new investment plan for sustainable Europe
The Executive Vice-President-designate reiterated his firm commitment to the transition to green finance, with numerous announcements, including the development of an “Investment Plan for Sustainable Europe” to unlock €1 trillion in sustainable investments over the next decade.
When asked by several MEPs about the sources of this funding, he did not give an exact percentage at this stage, assuring that a large part would be “new money”. He mentioned the InvestEU programme and the EU budget. The European Investment Bank (EIB) would be transformed into a “Climate Bank”, according to a formula put forward by French President Emmanuel Macron. “By 2025, we want half of its total funding to be devoted to climate change”, the candidate said, while currently the share is 25%.
Mr Dombrovskis’ performance apparently satisfied the Greens/EFA group. In response to a question from Bas Eickhout (Greens/EFA, Netherlands), he confirmed that he wanted to take concrete steps towards the adoption of uniform transparency rules on environmental and climate risks for companies, including a revision of the non-financial reporting directive.
“One thing is clear: we will continue to be ambitious in the field of sustainable finance”, he assured MEPs.
On the capital markets union on the agenda of the next ECOFIN Council (see EUROPE 12342/13), Mr Dombrovskis announced a new strategy to help small and medium-sized enterprises address the challenges of the green transition, digitisation and changing business models, as well as a new fund to help SMEs go public.
Completing the Economic and Monetary Union
On the strengthening of Economic and Monetary Union (EMU), Mr Dombrovskis said that after 5 years, the euro area was “definitely better equipped” to deal with new macroeconomic shocks, thanks to the creation of the European Stability Mechanism – the permanent rescue fund for the euro area – and the banking union.
“But we are not there yet, we still need to complete EMU”, the candidate considered, in response to a question from Danuta Huebner (EPP, Poland). Among the ongoing projects, he mentioned the completion of the banking union through the creation of a European Deposit Guarantee Scheme (EDIS), an additional reduction in non-performing loans. Work will also be initiated on the creation of a fiscal capacity for the euro area to stimulate investment and reforms in euro area countries (see EUROPE 12341/21) and a European unemployment reinsurance mechanism.
In addition, the former MEP said, Member States must pursue economic policies that allow them to build budgetary margins when the economic situation is good, in order to be able to survive in times of crisis.
Pedro Silva Pereira (S&D, Portugal) asked him about the importance of fiscal leverage in addition to the ECB's very accommodative monetary policy to support inflation and, finally, economic activity. The former Latvian Prime Minister recalled that a debate would be held on the relevance and simplification of European fiscal rules. He even admitted, in response to Luis Garicano (Renew Europe, Spain), that discussions could begin on the basis of the recommendation of the European Fiscal Board that the Stability and Growth Pact could be reformed with a view to introducing “a limited ‘golden rule’” that would exclude certain investments from the calculation of the public deficit.
Rethinking the anti-money laundering framework
Many questions have been raised about money laundering, for which Mr Dombrovskis will now have sole responsibility in the new Commission. In particular, Luis Garicano asked him to commit to presenting, during the first 100 days of his mandate, a proposal to establish a single EU-wide financial intelligence mechanism.
“We need to rethink the way our regulatory framework works”, admitted the Latvian, reiterating his support, already expressed in his written replies (see EUROPE 12337/12), for a Union body whose specific task would be to monitor and coordinate the fight against money laundering.
Which authority? According to him, it still needs to be discussed. But the European Banking Authority (EBA) has already been given new powers in this field, as part of the revision of the European Financial Supervisory Authorities (see EUROPE 12239/30), he recalled. “Its refusal to act [...] in the case of Danske Bank was very disappointing”, he nevertheless regretted (see EUROPE 12244/1) – a sign, in his opinion, that improvements in its governance are still needed.
Mr Dombrovskis also promised a new strategy on financial technologies, as well as legislation on cryptocurrencies. Inese Vaidere (EPP, Latvia) replied that the Commission was working on a regulatory framework for cryptocurrencies and was closely following Facebook's Libra stable cryptocurrencies project (see EUROPE 12316/9). The European Commission has asked the American social network and the Libra association to provide it with more information on this project.
The return of a European social security number?
Asked by MEP Tomáš Zdechovský (EPP, Czech Republic) about the issue of mobile workers struggling to receive their pensions once they retire, Mr Dombrovskis explicitly mentioned the project for a European Social Security Number, which is not included either in his mission letter or in his written replies.
“We are ready to improve the situation on the ground. We can look whether there is a scope for European Labour Authority to do something, because it concerns first mobile workers before they become pensioners”, he replied cautiously at first. And, stressing the importance of the exchange of social security related information, he referred to previous discussions on the “European Social Security Number initiative which also help and facilitate the exchange of information”.
The project was abandoned by the Juncker Commission, officially due to unresolved technical financing issues (see EUROPE 11980/6). Mentioning it would therefore not be insignificant on the part of Mr Dombrovskis.
For the rest, the Executive Vice-President-designate adhered to his engagement letter. He thus reiterated his commitment to monitoring the implementation of the European pillar of social rights, which, he acknowledged, tends to differ between Member States.
A series of concrete measures, which have already been described in detail by the Commissioner-designate for Employment, Nicolas Schmit (see EUROPE 12339/3), will therefore be adopted as part of an action plan to implement the pillar. These include an initiative on fair minimum wages, which would be presented in the first 100 days of the von der Leyen Commission's mandate, the European unemployment benefit reinsurance scheme or an initiative to improve conditions for workers on digital platforms, strongly called for by the EMPL Committee.
Mr Dombrovskis also underlined the key role of the social partners in ensuring that the economy is at the service of citizens. They are closely following the budgetary process of the ‘European Semester’, he insisted. Asked several times by MEPs, Mr Dombrovskis recalled in this respect the strengthening of the ‘social’ aspect of the European Semester under his current mandate, in particular with the integration of the social picture. During the next mandate, the UN's sustainable development objectives will be integrated into this process.
On Tuesday, the coordinators of the EPP, S&D, RE, Greens/EFA and ECR groups unsurprisingly approved Mr Dombrovskis’ candidacy, confirmed a parliamentary source to EUROPE. Only the ID and GUE/NGL groups came out against. (Original version in French by Marion Fontana, Pascal Hansens and Mathieu Bion)