The outcome of the confirmation hearing in the European Parliament of Valdis Dombrovskis, who is running for a third term as European Commissioner, this time responsible for the Economy and Productivity, was hardly in doubt on Thursday 7 November. His performance enabled him to demonstrate his in-depth knowledge of economic and fiscal issues, in an exchange with MEPs that focused on simplifying the rules and reducing the administrative burden.
Drawing on his previous mandate, during which he met MEPs “60 times” outside trilogue meetings, Mr Dombrovskis promised that he would hold regular talks with them and involve them in the formulation of the European policies under his responsibility. An ardent advocate of support for Ukraine in the face of Russia’s military aggression, and considered a ‘hawk’ in the application of the revised Stability and Growth Pact, the man who has the ear of the President of the European Commission, Ursula von der Leyen, and who will report directly to her on the issue of simplification, is approaching this new legislative cycle from a position of strength within the EU institution.
In his opening remarks, the European Commissioner-designate stressed the urgent need for the European Union to invest massively in order to remain competitive with its competitors and successfully make the transition to a low-carbon economy. He advocated the mobilisation of public and private resources to achieve this, mentioning the future ‘European Competitiveness Fund’ (see EUROPE 13510/13), but without outlining its precise framework.
With funds from the European Recovery Plan, Next Generation EU, set to run out at the end of 2026 and the further integration of capital markets taking time, Irene Tinagli (S&D, Italian) and Stéphanie Yon-Courtin (Renew Europe, French) asked him how more funding could be mobilised at European level, notably via a common European loan. For Mr Dombrovskis, there are several options: an increase in the EU budget through new own resources or increased national contributions, or even a new common loan.
But these discussions will take place in the context of the proposal on the post-2027 Multiannual Financial Framework (MFF) expected in 2025, he said.
Stability and Growth Pact. On the revised fiscal rules applicable from next January, the former Latvian Prime Minister remained on largely well-trodden ground, drawing inspiration from his written answers to MEPs’ questions (see EUROPE 13515/17).
“I will make sure make sure the new rules are enforced in a credible and even-handed way”, said the European Commissioner-designate in response to Markus Ferber (EPP, German). Himself from a “small Member State”, he made a commitment to Enikő Győri (PfE, Hungarian) to guarantee “equal treatment” between EU countries.
The Commissioner-designate pointed out that after a change of government, a Member State will be able to modify its multiannual budget programme. However, he stressed, “this does not mean that the fiscal consolidation effort will be postponed”, as “any slippage” in the past will have to be addressed at the start of the implementation of the revised multiannual programme.
When Manon Aubry (The Left, French) criticised the Commission for focusing solely on reducing public spending without addressing the issue of revenue, Mr Dombrovskis disagreed, pointing to the EU institution’s recommendations on combating tax avoidance and evasion. He also said he was prepared to take part in international discussions on the taxation of large fortunes.
Simplification. Many questions from MEPs focused on the Commission’s new mantra: simplifying EU rules to boost economic competitiveness.
For the candidate for the post of Commissioner, “every hour that en entrepreneur spend filling out forms, is an hour lost for developing the business”. However, he stressed, “simplification does not mean deregulation. We will not compromise our policy goals or our high social and environmental standards”.
Mr Dombrovskis pointed out that he would be heading up within the College a cross-cutting task force involving all the European Commissioners, and listed the tools that would be used to reduce the administrative burden on businesses by 25% (35% for SMEs): ‘stress tests’ on the Community acquis, competitiveness tests, application of the ‘Think small first’ principle, more impact studies before initiatives are presented, regulatory dialogues with stakeholders, use of the opinions of the Regulatory Scrutiny Board, etc.
To Jörgen Warborn (EPP, Swedish), who advocated the application of the ‘1 in, 2 out’ principle, and to Angelika Niebler (EPP, German), who was concerned about the additional administrative burden that the texts implementing European rules on sustainability (CSDD Directive, EU taxonomy, etc.) could entail, the Commissioner-designate replied that screening existing EU law would go in the direction desired by the two MEPs.
Responding to Anouk van Brug (Renew Europe, Dutch), he cited a number of priority areas: environmental sustainability, data protection, energy, cross-compliance rules for agriculture, and the implementation of European funds.
On the left of the political spectrum, Lara Wolters (S&D, Dutch) and Marie Toussaint (Greens/EFA, French) expressed concern, despite the Commissioner-designate’s assurances, about the risk of environmental and social standards being unravelled. In an attempt to respond to these fears, Mr Dombrovskis referred to the ‘CSDDD’ Directive imposing a due diligence on EU companies. According to the text, SMEs are not directly included in the scope of the text, but large companies tend to ask the Commission to provide data in order to comply with their own reporting requirements, he pointed out.
“It’s something we’ll have to analyse”, he added.
Asked by Lukas Mandl (EPP, Austrian) about the ‘Regulatory Scrutiny Board’, the former Latvian MEP felt that the composition of this body - five Commission officials and four external experts - corresponded to the standards set by the OECD. The EU Ombudsman points to potential conflicts of interest, retorted René Repasi (S&D, German), also pointing to the body’s lack of transparency. Mr Dombrovskis felt that the fact that the ‘Regulatory Scrutiny Board’ sometimes gives negative ex-ante opinions on the Commission’s draft legislation was proof of its independence.
Finally, when Pascale Piera (PfE, French) described the launching of infringement proceedings as a “vassalisation” of the Member States, the Commissioner-designate, as impassive as ever, lectured her: “European legislation is only as good as its implementation. It is the cornerstone of the proper functioning of the EU. Infringement procedures are used to ensure compliance with European rules (...) that have been agreed by the Member States and the Parliament”.
A single currency. Briefly, the discussions also covered the role of the single currency and the international dimension of Mr Dombrovskis’ future portfolio.
Fernando Navarrete Rojas (EPP, Spanish) asked whether, given the lack of enthusiasm in some Member States for the digital euro project, “a private initiative” could be envisaged. Shrugging it off, the Commissioner-designate simply pointed out that this ECB-led project aims to adapt to an increasingly digital payments environment. Even though “12%” of businesses in the EU no longer accept cash, the aim is not to do away with cash, he said. (Original version in French by Mathieu Bion)