 Gratisem, ki je Philip in E.C.B. za to, da imaš tvoja oportunitva. Protočaj, da površajte površanje več veči, da je v objezku, in da se prišli, da se prišli, da se prišli, da se prišli, da se prišli. moments Games trail and Commission will speak up. For europe en for the aspirations that Europe represents 2018 my generation was born when the and countries that share the belief in Europe. We should now speak to the generation of our children who aspire to live in a sustainable society that allows all of us to reap the benefits of new opportunities. Over 200 million EU citizens voted in this year's European elections and asked us to lead on the major challenges of our times, the transition to the healthy planet, harnessing a new digital world, upgrading our social market economy, promoting democracy and the rule of rule. As commissioner for economy, ensuring inclusive and sustainable growth is my main task. Because a society that stands by inclusion and solidarity is a community that brings people and nation together. And because solidarity makes economic sense. As president von der Leyen put it, we need to embark together on a transformation which will touch every part of our society and of our economy. In embarking on that journey, we need to embrace a vision that reconciles the social and the economy in today's Europe. The scale of the political project ahead of us is large and some may say daunting. It is important therefore to recall other great achievements deemed for long as illusionary, but which through visions and determination nevertheless took shape. What better example to keep in mind than the Euro and the economic and monetary union today being a natural part of our daily life. We celebrated this year the 20th anniversary of the Euro. The Euro, our common currency, is more than the coins and the notes in our pockets. It is a symbol of our shared identity and Europe's promise of prosperity and protection. EMU has had its fair share of bumps during its teenage years. One expects that from a youngster. But together we overcame the deepest economic and financial crisis experienced by our generation and saved the integrity of the Euro, which has come out stronger and more mature. Jobs, growth and investments are now back to or beyond the pre-crisis levels. Public finances continue to improve. Our banking system is more robust and the foundations of our economic and monetary union are stronger. That said, we still have a collective responsibility for supporting EMU in its adulthood. It is very reassuring that public support for the Euro is currently at its highest level since 2002, 76%. It is less reassuring that the legitimacy of the Euro and the institutions mandated to underpin it seems to be under some fire. Also in member states that have undoubtedly been among the first beneficiaries. How do you say in the language of this town? Prügel knabe, I think. We should redouble our efforts, not to artificially talk up the Euro, but to strive for an economic and monetary union that lives up to the expectation of our citizens, for an economy that works for people. Several key elements of the banking union have been achieved. The Euro area has been equipped with a single supervisor and with common crisis management and crisis resolution mechanisms. The macroeconomic and fiscal surveillance of member states has been significantly strengthened. The independent and active policy that the ECB has conducted has been instrumental. Without it, I doubt that I would stand here today on the back of 26 quarters of uninterrupted economic growth. Ladies and gentlemen, with clouds forming on the horizon, some link to trade tensions and other to slower global growth, we must keep up. We need a more attractive investment environment and growth, which creates quality jobs, especially for young people. Many citizens pay the height all to the crisis. We have not forgotten them, not at all. And our endeavors for a deeper, stronger EMU are guided by the well-being of all citizens. Europe faces a combination of short-term and longer-term challenges, which are already knocking on our door. Subdued economic performance will be the major one for the years to come, against the background of an aging population increasing inequalities among our citizens and climate change. Growth in the longer term is held back as productivity growth remains low and challenges related to aging are becoming visible. Europe has seen several years of recovery, yes, but rather less progress in social and environmental sustainability. And we now face headwinds. And the long-term challenge of making our economies more productive, more sustainable and more inclusive is starker than before. Euroarea growth is said to remain relatively weak at around 1% of the forecast horizon, down from around 2% in what we use to consider trend growth. Unless something changes, the underlying factors point to a low for longer growth scenario. In spite of all effort made, core inflation remains in the 1.5% range. Inequality is on the rise with the richest 1% of the population accumulating more and more wealth. We have for some time lived with unusually challenging macroeconomics conditions in the Euroarea. A low growth and low inflation rate environment constrains monetary policy to a policy of low interest rates, operating close to, or indeed at, the effective lower bound. If conditions were to deteriorate, the risk of monetary policy being constrained could materialize. This is clearly not the macroeconomic environment that the signatories of the Maastricht Treaty could have envisaged when they agreed on the instruments for fiscal policy. Ineočenči, monetari policy and automatic stabilizer are enough to stabilize the economy. At the same time, the needed policy answers are made more difficult by the breakdown of multilateralism at the global level. Multilateralism has been put into question by emerging trade conflicts. This year and next, the contribution from trade, from net export to growth is expected to be zero or negative. Given the EU's position as a highly open economy with large export dependent sectors, the evolution of trade disputes has the potential to touch the foundations of our growth model. A coherent strategy beyond monetary policy is therefore needed to avert the perspective of a 1% economy. To steer the economy towards sustainable growth and jobs, our political will and the full set of policy tools available in the euro area needs to be deployed. From my point of view, in four priorities. One, meeting the demand for the EU to play a more assertive global role. Two, a true financial union as the key element in kompleting EMU. Three, a fiscal policy and the fiscal governance appropriate to the new environment. And four, efficient decision making, reviving the community method. The first point, the global role. In the current environment, which is challenging the multilateral system, as we have come to know, there is both space and international demand for the EU to play a more assertive global role. President von der Leyen has claimed a geopolitical role for the commission. This encompasses foreign and defense policy, obviously, and commercial policy. But also enhancing the role of the euro internationally. This would make the global financial system less vulnerable to shocks, strengthen the monetary sovereignty of the euro area, and improve the liquidity of and preference for euro assets. The new commission is equally committed to a more strategic use of economic and environmental diplomacy, with EU bodies and institutions, leading by example, and encouraging the use of the euro in their operation, like debt issuance and international payments. A strong euro externally need, obviously, a strengthened architecture of the economic and monetary union internally. Say differently, it will be very difficult to have a stronger global role for the euro without delivering on the domestic agenda. Banking union, the capital markets union in the medium term, and the more balanced policy mix in the short term, are conditioned sine qua non for Europe to count more in global governance. My second point, completing EMU. Many of the objectives the von der Leyen commission has set for its mandate require decisive progress in completing EMU. This is an overarching priority for the euro area to become the engine of growth, prosperity, and stability for the whole union. We have now reached a critical point. While there have been important first steps, the agreement in principle on the reform of the ESM, the budgetary instrument of convergence and competitiveness, the overall progress toward completing the EMU has been so far unsatisfactory and below par of what is truly needed. We need to be able to go further. We collectively need to cross those red lines that have generated a stalemate in completing the EMU. We need to take action now to have EMU completed by the end of this mandate. In the short term, taking concrete steps toward completing EMU, which requires increased political determination, would reduce uncertainty and thus be positive for investor confidence and economic growth. It is clear that the level of ambition we have seen so far is not sufficient. Completing the financial union is a prerequisite for ensuring its stability and spurring private investment on the scale needed to address the medium term challenges, including the green transition. Member states will not be able to generate sufficient funds on their own. The banking and capital markets union are also necessary to address the remaining pockets of instability and the fragmentation of banking and capital markets. These are still a source of concern for investors, especially global ones, and a key obstacle to investment. Europe has shown that we can act as catalysts with the Junker Plan and its European Fund for Strategic Investments. The new tools that we could devise for addressing climate change could also have a positive side effect for stabilizing our economy. For instance, if we were to give our banks access to common green assets in the future, one of the instruments that could make our currency union more resilient is a euro area safe asset. Let me refer here to a recent speech given by Benoak Re, who considered the introduction of a safe asset as instrumental to break the sovereign bank nexus, to support transmission of monetary policy, to strengthen the international role of the euro and finally to integrate our capital markets. My third point, fiscal policy. I believe that we need to reconsider the role of fiscal policy given the current macroeconomic environment. Some economists have argued that fiscal rules should incorporate and knock out close when monetary policies reaches the zero lower bound. This would allow fiscal and monetary authorities to cooperate to implement the fiscal expansion. I will not go so far. We should not knock out our fiscal rules. Let us not forget the experience of the euro area sovereign debt crisis. Having a sustainable debt in those member states with high public debt remains a key objective for fiscal policy. An important discussion needs to happen, however, on the role of coordination between the monetary and fiscal authorities. I fully agree with Mario Draghi's point that monetary policy can still achieve its objective, but it can do so faster and with fewer side effects if fiscal policies are aligned to it. The stability and growth pact gives the power to enforce maximum thresholds for member states deficits and debt levels, but the EU has no power to compel member states to undertake a fiscal expansion. This limits our ability to achieve and appropriate fiscal stance for the euro area. It may not be a problem in a normal macroeconomic environment, but, as I have said, the conditions that we are living through are not normal, though they may persist. So they are not normal, but they may persist. Since budgetary policies are the responsibility of member states, the coordination of fiscal policy becomes essential. Fiscal responsibility in high debt countries should go hand in hand with more supportive policy action in low debt countries. Let me be clear in this. The need for coordinated fiscal policy action does not mean a more lenient fiscal discipline. Those member states that have high public debt must put it on safe downward path. We should not forget the original aim of our fiscal rules, namely to ensure the sustainability and safety of public debt. This is also a matter of responsible behavior vis-a-vis the future generations. This also means that the large public investment needs mentioned earlier must be met in a way that ensures debt sustainability and respect of our rules. We will therefore continue to make full use of the flexibility allowed within the stability and growth pact while promoting a growth friendly composition of public finances. A last word on fiscal policy, the journey will not be complete without building a central fiscal capacity for the euro area. This is key to provide the European Union with some powers over macroeconomic stabilization policy. In a few weeks, the commission will present its review of the six and two pact. This will provide us with a timely opportunity to start a thorough debate. It will last a few months, this debate with member states, the European Parliament, the stakeholders on the future of our fiscal framework. So the discussion today is also timing from this point of view. My fourth point, more efficient decision making, the institutions built under the extreme pressure of the crisis were based on the intergovernmental method in decision making, which has become now dominant. But this method is unsatisfactory, both in terms of efficiency and democratic accountability. Effective democratic checks and balances can be fully achieved when decisions affecting the euro area as a whole are taken by supranational institution, in my opinion. It is now the right time to reflect on the appropriate institutional structure for the long term. This could be discussed also. This could be discussed as part of the conference on the future of Europe, announced by the commission president. Ladies and gentlemen, we need to have a vision of what the economic and monetary union would be once it reaches its steady state. We need to be ambitious, but also cautious. We must tread carefully ahead to have support of member states and of citizens. Most of our interlocutors acknowledge the challenges of our institutional architecture. Steel views are very different on what is required to address them. The difference of views, however, mostly due to an underlying lack of trust. This brings me to my last point. The economic crisis has undermined trust among member states, with a sharp divide between debtor and creditor countries. To reform the MU and build strong and legitimate institution, we have to overcome the divide between creditors and debtors, risk reducers and risk sharers, and responsibility versus solidarity. We need to rebuild confidence. To do so, a diplomatic effort will not be enough. Confidence must be built up around the common vision and project. This is the opportunity offered to us by the challenge of the climate transition, which President von der Leyen has put at the heart of the Commission's action. We must heed the opportunities from the climate transition whilst reducing inequalities. Addressing inequality and climate change are the center of citizens' concerns, and the Commission will include them in the strategy of the new European semester that for the first time integrates the sustainable development goals. The economic impact of climate change is one of the biggest systemic risk facing the world economy, financial systems and societies today. The most vulnerable in our society will be the hardest hit from environmental degradation with large divergences in income already existing within and between member states. However, if tackled in the right way, environmental and inequality challenges could be an opportunity to revitalize the European economy, reorienting it towards sustainable development. That's why one of my key priorities for the coming year, as I explained earlier this week, will be to make a success of integrating the UN SDG goals into the European semester of economic policy coordination. It will be a process, not a snap decision, but I think it is very relevant. And that's why the Commission will present next month its sustainable Europe investment plan, because this extraordinary transformation of the European economy that we want to deliver will require an extraordinary plan for investments, accompanied by an appropriate regulatory framework, a review of the taxation on energy, and appropriate financial instruments, the Green Deal and the Digital Revolution can be formidable means of generating sustainable growth. But they must be underpinned by the new framework for investment, state aid rules, and taxation. We'll experience changes in economic sectors, ranging from transport to energy to housing, without president since the decades following the Second World War. It is a unique opportunity that we cannot allow ourselves to waste, and it is also a very heavy responsibility. Tudi, v EU je vsečen, izgledajnega agenda for the years to come. In vsečen za ekonomijke and monetary union to be successful, we need to continue work in a spirit of openness and solidarity. As Christine Lagarde said in her first speech as ECB president last month, the answer lies in converting the world's second largest economy into one that is open to the world but confident in itself, an economy that makes full use of Europe's potential to unleash higher rates of domestic demand and long-term growth. Achieving that goal calls for policies that go beyond the business as usual. Whether we rise to this challenge will decide the quality of life of the European citizen in the short term and in the long term. Thank you for your attention. There's no doubt, given the wide-ranging and integrated approach taken in that speech, that I'm sure there's gonna be no shortage of questions or comments. So let me immediately see who has a counter question and the first person I see is Olivier. So if the microphone can... Thank you for your speech. Jean-Tirol yesterday gave a long talk for the Benoît Corée event and it was about global warming and he made a passionate plea for the carbon tax. He said everything else basically will not work unless there is a carbon tax. Do you have a sense that... I have my phone, which is ringing at the same time. Do you have a sense that we may see it in our lifetime? Do you want to collect questions? Maybe two or three. So we'll collect a few questions before turning back to the commissioner. So please, just towards the back. Yeah, thank you. And maybe if you can just say who you are. Lukas Gutenberg from the Jacques de Lois Institute in Berlin. My question on the big, the way it was negotiated now in the member states doesn't have a lot to do anymore with the originality of a eurozone budget. It has no stabilization function in it. And in which condition would the commission still consider supporting that instrument and at what point would you say it's not worth it anymore? I feel obliged with that question to maybe augment it for you, which is what is true is something which does not have a cyclical sensitivity could be called not counter cyclical. But a lot of the public sectors is essentially acyklical. So maybe avoiding pro cyclicality is a big step forward, even if it's not explicitly counter cyclical. It's because we know that country, this is the old Jordi Galli result. A big public sector is very stabilizing because it doesn't swing with the cycle. So it's this distinction between... Thank you. But maybe you have a different view. So I saw someone else, please, here. So hello, Jean-Baptiste Michaud, we call it political technique. So you haven't referred to Japan, so you mentioned extensively about the need to better coordinate within the eurozone. I think few will disagree. But what about the prospect of being well coordinated and stagnating together, like Japan is stagnating, so... Okay, maybe, please. Linda? So you mentioned one of the priorities... More than four, I'm not able to... If you're being completing the EMU, does that include enlargement of the euro area? Yes. Discussing on having, as a target, our lifetime is always ambitious, but I think we should work... I'm answering to Olivier Blanchard. We should work to have this mechanism introduced in the lifetime of the commission, which is five years, and maybe even in a shorter time. I think that the process of what President von der Leyen presented, or the Green Deal, is a process to be looked at in general. It is difficult to take one thing without the others, because it will not work. So, I think that if we are serious in progressing with the targets that we gave to the union for this Green Deal, the carbon border, now we call it adjustment mechanism, will clearly become absolutely inevitable. Because without it, either we are not serious in the program. So, it is not true that we will modify taxation on energy. It is not true that we will change in some way also the rule of our public financing, et cetera, et cetera. But if this happens, and if it carries a transformation of the dimension that I was a little bit, perhaps exaggerating, mentioning the dimension of the transformation that we had in Western Europe after the Second World War, which means in some sector changing consumer goods and relevant things, if we will have this without a carbon border adjustment mechanism, we are only weakening our industries and our European economies. Will this be the commission, and specifically the tax-shoot direction that is working in this mechanism? The line to take is always, it has to be WTO compatible. Let's hope that WTO will continue to have a fundamental role in our multilateral. But my answer is not only in our lifetime, but in the new commission lifetime, we need to have these mechanisms if we are serious with the climate transition. I am grateful to Philip Lane because of his acyklical definition. For sure, the BICC is something that scaled down further proposals on stabilization functions. But I think that from the commission side, we have to support it because to simply kill it would be nothing of a progress. So we are working on it with total awareness that this is not the sufficient level of stabilization tool that we need. Yes, Japan is strongly coordinated. In fact, we don't have the proof of the contrary what would have happened for the Japanese economy if the reaction of their long-lasting low growth would have been a scattered reaction. So I think that reasonably to have a more coordinated fiscal policy in such a scenario of low for long growth is obviously necessary. Then you can discuss how, but the necessity, I think, should be honestly clear. Enlargement is in our treaties, in our mission. The currency should be the currency of the union. We know that there are countries that probably will never accept this. Well, never say never in politics, but at the moment they will never accept this. We know that the bigger of these unfortunately is leaving the union. And this will create a little bit of different equilibrium. But we have to avoid that this create a asymmetry, penalizing, putting difficulties to member states not in the single currency. So from one side there is the strategic message which is the single currency is the single currency of the union, full stop. And this is the horizon. The non-EU members, non-Euro members will be in some way not important as they were because of Brexit, but for the union they will remain important as they were before. And as you know, there are a couple of countries that are on the process of very not easy and not short of joining the currency. Thank you. So if you have time, maybe we'll go for another round. So please, let's see if there are other questions. Please. Thank you. Rebecca Siegel from DJI. And my question is, you mentioned the conference on the future of Europe in terms of the democratic accountability side. But do you foresee in terms of substance EMU being high on the agenda? And what would you like in terms of substance to be discussed as part of this conference if you can have a say? OK, so let's take that question. Well, the conference on the future of Europe is still a not clearly defined object. What is clear is that there is a strong political will from the parliament on this conference that the commission and member states are on board. But the agenda of the conference has to be defined. What is the risk? Well, the opportunity is that in any case, to have a public discussion is relevant. But public discussions, if they have not a clear agenda, are not always the right thing to do. So providing that having the public discussion, it in any case positive from a democratic point of view. We have to make an effort to define the agenda as far as we can go. From my point of view, as Paolo Gentiloni and also as commissioner for economy, I think that one of the issues that could be on the agenda is exactly what I was mentioning before. I mean, the institutional dimension of economic governance. Because the fact is that the years of the crisis probably inevitably brought the focus of action in the hands of member states. And this was probably inevitable. But at the same time, we have to be very cautious on deciding that this is the future of the union. Because I am not totally convinced of this. Then there is the legal constraint that this kind of discussion can produce some result. But if we want result involving the change of treaties, this would completely change the scope and the dimension of the conference. So we need to put the agenda on the right direction and from my point of view, the institutional governance of economic processes. And also the role of the parliament in this. Just one example to finish, Philip, is I was surprised, I am a newcomer in the Brussels mechanism of the enormous importance for the parliament of all the taxation matter, which is in my portfolio, by the way. And where we have the rule of the unanimity with this passerell clause, which is a sort of catch-22, because you can skip the unanimity if there is a unanimous decision to skip the unanimity, which is not perfect. I understand the reason, obviously. So the parliament wants to play a role on this. Are we sure that this is not only something coming from the parliament, but also from our citizens? I think that it is coming also from our citizens. The demand for a stronger European attitude, we were talking before of carbon border, but we could talk about the digital tax, about the fight against tax avoidance. These are things where the parliament wants to have a stronger role. Are we with this or against this? So I think the institutional dimension of economic governance could be a good point on the agenda of this conference of the future of Europe. Thank you. So I'm sure we can be unanimous in expressing our gratitude for both the very interesting and, literally, agenda-setting speech and your approach to taking, in a thoughtful way, the questions that you received. So again, let me express my gratitude for your participation. And of course, in the panel that immediately follows, many of these topics will come up again. But thank you.