The COVID-19 pandemic has caused an unprecedented economic shock of high human costs and deep social repercussions. Unprecedented steps to mitigate the impact of the crisis were taken at the national, euro area and EU level. A vigorous policy response was put in place to support the economy, citizens and businesses with the Next Generation EU being a vital part of that strategy.
The dividend of these unprecedented policy measures is beginning to be seen, with the European Commission’s Spring 2021 Forecast (published 12 May) demonstrating clear signs of recovery in the European economy. There has been significant upward revision to growth prospects, with +4.2% growth now expected for 2021 (instead of the +3.8% predicted in the Winter forecast) and a return to pre-pandemic levels of output earlier than envisaged next year.
The improved outlook reflects global prospects, the effective European economic response and the accelerated momentum of the vaccine roll-out which has been crucial in helping economic confidence.
The EU, through coordinated action, has been at the forefront of the campaign to deliver vaccines for all, with 40% of EU population now vaccinated.
The economic recovery is gaining momentum as economies re-open and as Recovery and Resilience Facility (RRF) funds come on stream. The RRF will also drive transformative changes in the structure of our economies, making them greener and more digital.
To be sustainable, the recovery also needs to be inclusive and limit risks of long-term scarring. That's why budgetary supports, both at national and EU levels will continue to address the uneven impacts of the pandemic and help those most exposed to the effects of the pandemic.
There is still some way to go. Our policies will need to remain agile given the uncertainty associated with the pandemic and its variants.
The Eurogroup has been at the forefront of this joint response and it will continue to play a key role in the euro area in identifying, coordinating and implementing the policies that will deliver a robust, inclusive, and sustainable recovery. The Eurogroup’s work programme until December 2021 reflects this and a number of other priority policy areas.
Strengthening the euro area economy is essential for the recovery and the return to a sustainable growth path. Through our high-level discussions, it is my priority to ensure that the Eurogroup remains a forum for promoting common understanding on challenges and defining appropriate policies for the euro area. As such, we will continue to regularly monitor macroeconomic, fiscal and corporate sector developments and hold discussions on structural reforms. Building on our agreement, last November, on the reform of the European Stability Mechanism and the early introduction of a common backstop to the Single Resolution Fund, we will continue to pursue the goals of deepening the Economic and Monetary Union and completing the Banking Union. We will also continue to make progress on how to best pursue the opportunities brought by the green and digital transition, including the potential development of a digital euro. We also remain flexible to address emerging or evolving issues, particularly in relation to the pandemic.
I am also committed to involve non-euro area Member States in matters of common interest and to work closely with the EU Institutions and the Council Presidency to achieve our joint policy priorities.