With the beginning of 2021, there is an urgent focus on economic recovery through the elaboration, approval and implementation of Member States’ recovery plans, which will be financially supported by the Recovery and Resilience Facility, the budgetary instrument at the heart of the Next Generation EU European Recovery Plan, according to the Portuguese Presidency of the Council of the EU.
The EU27 have until the end of April at the latest to present an integrated document compiling the investments and measures they intend to take to relaunch their economy, taking into account European priorities relating to ecological and digital transitions (see EUROPE 12628/3, 12626/1).
In the meantime, the Portuguese Presidency plans for the European Ministers of Finance to regularly review this work, particularly on 19 January and 16 February, with a view to the formal adoption of the national plans on 18 May.
“In this context, we will hold the High Level Conference on Recovery in Lisbon in June to discuss the economic and financial situation, taking into account national plans for recovery and resilience”, stresses the Portuguese Presidency, which intends to pay “special attention to the economic sectors most affected by the crisis, namely tourism and the creative industries”.
EU Finance Ministers will regularly review the economic situation in the light of the evolution of the health situation related to the Covid-19 pandemic. The President of the Eurogroup, Paschal Donohoe, will be in Lisbon on Thursday 7 January to hold consultations with the current President of the Ecofin Council, João Leão.
In 2021, the freezing of the Stability and Growth Pact will continue with an expansionary fiscal stance in the euro area (see EUROPE 12624/3). According to the European Commission, the recession will reach 7.4% of EU GDP in 2020 before an expected rebound to 4.1% of GDP this year thanks to the widespread availability of an effective Covid-19 vaccine.
At a time when the economic crisis risks widening macroeconomic divergences between Member States, Lisbon also stresses the role of economic, social and territorial cohesion policies (see other news). And the link between the European Recovery Plan and the budgetary process of the ‘European Semester’, the European framework for economic governance, will be “essential”, said the Ambassador to the EU, Nuno Brito, on Tuesday 5 January, during an online event organised by the International Press Association (API).
Furthermore, the deepening of Economic and Monetary Union (EMU)—including the creation of a European Deposit Insurance Scheme (EDIS)—and the capital markets union is also a Portuguese priority. On Tuesday 19 January, the Commission is due to present a communication on strengthening the EU’s economic and financial sovereignty.
In the banking sector, the upsurge in non-performing loans and its impact on the soundness of the industry will be closely monitored as economic support measures are lifted. It should also be noted that in May, the Portuguese Presidency could inform the Ecofin Council on the impact of Brexit on trade in goods.
Financial services. On the ‘financial services’ aspect, the Portuguese Presidency announces that it will pay particular attention to the new strategy on sustainable finance, which should be presented during its Presidency.
With regard to the digital transition of the financial sector, Portugal advocates an approach “that boosts technological development and ensures financial stability, linking financial regulation and supervision, competition and data protection”. In this area, Lisbon intends to give priority to legislative proposals on crypto-assets (see EUROPE 12567/2), the operational resilience of financial intermediaries (see EUROPE 12567/4) and payments (see EUROPE 12567/1).
The country will also be responsible for monitoring the Commission’s Action Plan to take forward the Customs Union (see EUROPE 12569/4) and will focus in particular on the development of the EU Single Window Environment for Customs.
See the programme of the Portuguese Presidency https://bit.ly/38Xm0oS (Original version in French by Mathieu Bion with Marion Fontana and Camille-Cerise Gessant)