Today we are relaunching the debate on the review of the EU macroeconomic governance framework.
This debate was put on hold for more than a year due to the pandemic and we are now in a very different place than before the pandemic.
COVID-19 has profoundly affected our lives, societies and economies.
Thanks to our strong and coordinated response to shore up EU economies, we were able to cushion the impact on the economy and people's livelihoods.
We are exceeding our growth forecasts.
Unemployment is almost back to pre-crisis levels.
But the crisis also made some vulnerabilities more acute and brought some trends to the fore.
Today's analysis takes that changed reality into account.
Let me just highlight a few developments.
The fiscal support measures have driven up deficit and debt levels in all EU countries.
Investment needs for the green and digital transition and to improve the resilience of our economies have grown.
So we must tackle these challenges head on to make our societies and economies more sustainable, fair and competitive.
For that, we need effective rules.
Overall, the EU fiscal framework has functioned well. It helped to keep public finances under control, particularly the 3% deficit threshold, which became a yardstick to avoid excessive deficits.
And the flexibility of the rules proved itself during the pandemic.
But looking through today's lens, the weaknesses that we identified almost two years ago have only become more relevant.
A few key points:
It will be essential to reduce high public debt. This will determine how well we can respond to possible future shocks.
And it will help to maintain favourable financing conditions for investments needed for the future.
But we need to go about this in a smart way: in a gradual, sustained and growth-friendly way.
This means promoting high-quality public investment: crucial for addressing the massive needs related to the green and digital transition.
These two elements go hand in hand - reducing debt as well as investing. It underlines the importance of improving the composition and quality of public finances, and our framework should reflect this.
Funding from the Recovery and Resilience Facility will also play an important role here.
EU countries should make good use of it, obviously.
The RRF presents a unique opportunity to raise growth potential and support fiscal sustainability, by financing additional productive investment on top of national investment - backed by the relevant reforms that each country needs for future growth.
The RRF also has a unique governance approach, built on transparency, ownership and dialogue. It may act as an inspiration for our economic governance review.
Simplification will be vital. We need simpler rules, making more use of observable indicators. This will help ownership and compliance, which has been lacking.
Our analysis does not only cover fiscal rules.
Paolo will also say more on other aspects.
For the way forward, it will be important to build consensus, because fiscal rules will only work properly if everyone agrees and sticks to it.
This is why we are launching the public debate today. We hope to gather feedback from a broad range of stakeholders.
We will provide orientations on possible changes to the economic governance framework with the objective of achieving a broad-based consensus well in time for 2023.
In the meantime, we will carry on regular surveillance.
With the deactivation of the general escape clause expected for 2023, in the first quarter of next year we will provide guidance for fiscal policies for the period ahead.
The purpose of this will be to facilitate the coordination of fiscal policies and preparation of Member States' Stability and Convergence Programmes.
This guidance will reflect the economic situation, the specific situation in each Member State, and discussions on the economic governance framework.
To conclude, let me reiterate that the main objective at this stage is to listen to the stakeholders.
We are relaunching the public consultation. We will need those insights to help us identify a path forward on an economic governance framework to achieve sustainable public finances and growth, avoid macroeconomic imbalances and promote convergence in today's and tomorrow's world.
Thank you and now I hand over to Paolo.