Executive Vice President –Designate An Economy that Works for People

Opening statement at the European Parliament hearing

Brussels, 8 October 2019

Godātie Eiropas Parlamenta deputāti,

Vispirms es vēlos pateikties par iespēju jūs uzrunāt, lai iezīmētu tuvāko piecu gadu laikā veicamos darbus Eiropas ekonomikas un cilvēku labā.

Pēdējo piecu gadu laikā, kā Eiropas Komisijas viceprezidents, esmu strādājis ciešā sadarbībā ar Eiropas Parlamentu.

Es pats esmu ticis trīs reizes ievēlēts kā Eiropas Parlamenta deputāts, līdz ar to sadarbību ar Eiropas Parlamentu es uztveru kā pašsaprotamu un neatņemamu sava darba daļu.

Šogad Latvija atzīmē 15 gadus Eiropas Savienībā un 5 gadus eirozonā. Kā finanšu ministrs es esmu aktīvi strādājis pie Latvijas integrācijas Eiropas Savienībā. Savukārt kā Ministru prezidents es vadīju valsts pievienošanās procesu eirozonai.

Mana darba pieredze gan Latvijas valdībā, gan Eiropas institūcijās ir tikai stiprinājusi manu pārliecību, ka kopā mēs varam vairāk, nekā katrs atsevišķi. Ka spēcīga un stabila Eiropas Savienība ir pamats arī dalībvalstu sekmīgai attīstībai.

«Pastāvēs, kas pārmainīsies».

Tā teica izcilais latviešu dzejnieks Jānis Rainis.

Mums priekšā ir lielas pārmaiņas, virzība uz digitalizētu un klimata neitrālu ekonomiku, vienlaikus saglabājot Eiropas unikālo sociālās tirgus ekonomikas modeli.

Esmu gatavs uzņemties jaunos pienākumus, lai koordinētu darbu pie Eiropas ekonomikas, kas strādā cilvēku labā.

{Translation from Latvian:

Honourable Members of the European Parliament,

First, I would like to thank you for the opportunity to address you and give an overview of the work that needs to be done for the European economy and people in the next five years.

Last five years, as Vice-President of the European Commission, I have been closely working with the European Parliament.

I have been myself elected a Member of the European Parliament three times, thus I see the cooperation with the European Parliament as self-evident and integral part of my work.

This year, Latvia celebrates 15 years since joining the European Union and 5 years of membership in the euro area. As Minister for Finance, I have actively worked to integrate Latvia into the European Union. Further, as Prime Minister, I have led the process of joining the euro area by Latvia.

My work experience both for the government of Latvia and the European institutions has only strengthened my belief that together we can do more than individually. That a strong and stable European Union is also the basis for the successful development of Member States.

«He who changes will survive».

This was said by an outstanding Latvian poet Jānis Rainis.

Great transformation is ahead of us: we will move towards digitalised and climate neutral economy, at the same time maintaining the unique European model of social market economy.

I am ready to assume my new duties in order to coordinate the work on the European economy that works for people.}

Honourable Members, I will now continue in English.

Looking at the world today: we can no longer assume that economic and social progress, based on democratic values, international cooperation and more integrated markets, will remain on a steady path.

The world is turning more multi-polar, more uncertain and confrontational.

Trade tensions have escalated.

This is already taking a toll on the global economy.

In Europe, Brexit - especially a no-deal scenario - would inflict further damage.

And we face broader challenges.

Climate change is one. We have to step up our efforts to mitigate it.

And we have to do that now.

New technologies are changing the way we live and work.

To compete on the world stage, Europe must be a leader in digitalisation and innovative technologies.

Demographic changes in Europe, ageing populations, mean we have to adapt our labour markets and social protection systems.

All these developments will profoundly transform our economies and societies, and require the right policy response.

This is not “business as usual”.

Europe’s prosperity and our social market economy model are at stake.

We need to manage this transition so that the European economy works for all people.

We will have to think of economic, social and sustainable as one.

If I am confirmed, this will be the basis of my work for the next five years.

Now let me address these points in more detail.

First, I aim to strengthen Europe’s economic sovereignty at this time of increasing global uncertainty.

Then, I will work to make sure that our economic and industrial policies support the green and digital transformations.

Our social policies must accompany these transformations so that we build a more inclusive society. 

Honourable Members

The EU economy is a powerful force in the world.

The Single Market is our biggest asset: it accounts for over 500 million consumers, 22 million businesses, and a GDP of over 15 trillion euros.  

The euro is a successful international currency, the second most used for payments and in global reserves, only behind the U.S. dollar.

We have strengthened our Economic and Monetary Union. And the euro area remains open, of course, to countries working to join it - like Bulgaria and Croatia.

But to leverage the euro area’s political and economic weight requires us to push further.

I want to reinforce our capacity to act independently. 

Being a strong and stable economic player will enable us to promote an international rules-based order and counter the trend towards regionalisation in the world.

We have to deepen the Economic and Monetary Union.

Europe’s economic sovereignty is supported by strong national economies. They undergo reforms to keep pace with the ongoing transformation.

Strong economies build fiscal buffers in good times for later use when the economy slows down.

This is the aim of the fiscal rules underpinning the Stability and Growth Pact.

But the rules have become too complex. We will need a substantial debate to see if there is a broad consensus to simplify them.

Economic sovereignty requires that the euro area has solid financial firepower to prevent and fight crises.

That means a reformed European Stability Mechanism and the euro area budgetary instruments, for which the Commission has presented legal proposals.

We will build on this by developing a European Unemployment Benefit Reinsurance Scheme.

You cannot have economic sovereignty without a strong financial system.

In the previous mandate, we have made significant progress on the Banking Union and the Capital Markets Union.

Europe’s banking sector is on a much more solid footing than when we took office in 2014.

Banks are better capitalised and more resilient in terms of liquidity.

Levels of non-performing loans have fallen by more than a half, although they remain too high in some countries.

The Banking Union must now be completed.

As part of that, we need to agree on a European Deposit Insurance Scheme: to reassure Europeans that their deposits have equal protection. Wherever they live.

Small and medium enterprises are the backbone of Europe’s economy.

Their innovative capacity and talent are vital assets for Europe’s economic sovereignty. However, all too often, they move abroad to scale up.

Why are our future champions leaving? One reason is that they find it hard to get market-based financing here.

This is one important reason why we need the Capital Markets Union.

The new Commission will propose a new fund to help SMEs to go public.

Together with my colleagues, I will propose a strategy to help SMEs tackle challenges relating to the green transition, digitalisation and changing trade patterns. 

In the next weeks, I will gather policymakers, industry and consumers to collect new ideas to develop our capital markets.

Asserting European sovereignty is also about assuming responsibility for the integrity of our financial sector.

President-elect von der Leyen has entrusted me with leading the fight against money laundering.

I take this very seriously and look forward to working with our European and international partners.

We need to strengthen supervision and enforcement, including across borders.

I would see a lot of merit in conferring specific anti-money laundering supervisory tasks and their coordination to a Union body.

Honourable Members

My second objective will be to use fiscal, economic and financial policies to support the green and digital transformation.

As you know, my colleagues Frans Timmermans and Margrethe Vestager will be charged with managing change in these two areas and I am looking forward to cooperating with them.

To finance the transition to a climate-neutral economy, Europe needs massive investments – trillions of euros over the next decades.

We will need both public and private funding.

To stimulate private investment, we should create regulatory incentives, and use the possibilities of the EU budget to leverage much more still.

On the regulatory side, I take pride that the European Union was the first region to enact hard law on sustainable finance.

We must now agree on a unified EU classification system, or taxonomy, to define what is sustainable.

And we need to develop standards for green bonds and ecolabels.

In parallel, we need to build on the Investment Plan for Europe.

Together with my colleagues, I will draw up a Sustainable Europe Investment Plan to unlock €1 trillion of sustainable investment over the next decade.

I will work with the European Investment Bank to transform it into our Climate Bank. By 2025, we want to see half of its total financing dedicated to climate.

Honourable Members

Europe has been a global industrial leader for many decades.

To maintain that lead, we need to preserve Europe’s strong productivity and competitiveness, given the many challenges ahead.

This is why I will work with my colleagues to develop a long-term strategy to ensure that Europe remains a top industrial power.

Trade policy has an important role to play.

It can help to promote our broader objectives in terms of the economy, technology, green transition, sustainability or labour rights.

The EU is the world’s largest exporter and importer. It must continue to be a global standard-setter through an open and fair trade agenda. 

This is especially true with the advance of new technologies.

In the area of finance, they bring huge potential – for example, by giving consumers better and faster access to finance.

I will put forward a new strategy for Europe to get the best out of FinTech and compete globally. Instant payments are a good example.

At the same time, we must address risks such as unfair competition, cybersecurity, and threats to financial stability.

For instance, Europe needs a common approach on crypto-assets, such as Libra. I intend to propose new legislation on this.

Honourable Members

The green and digital transformation can only succeed if it is seen as socially fair. This will not happen automatically.

So my third objective is to make sure that our social policies evolve to accompany these transformations.

In that way, we will improve people’s lives and make sure no-one is left behind.    

We will present an action plan for implementing the European Pillar of Social Rights effectively across the EU.

We will also bring forward targeted legal proposals, starting with a framework for minimum wages. 

We must continue to build on the European Semester. Social considerations already account for nearly half of our country specific recommendations.

I intend to keep this focus in our future economic governance.

We will also integrate the UN Sustainable Development Goals into the Semester objectives to promote both inclusive and sustainable growth.

During this mandate, we relaunched social dialogue in the EU.

Involving social partners fully will be crucial for the digital and green transformation, and for putting the European Pillar of Social Rights into effect.

Inclusive and sustainable growth is also about ensuring the economic convergence and cohesion of Europe’s regions.

EU structural funds can help us meet our environmental and innovation goals, and provide upskilling and life-long learning.

And we will help to support the people and regions most affected by the green transformation through a new Just Transition Fund.

One final point – there is no social fairness without tax fairness.

This Commission has put in place more binding reforms on fair taxation in the last five years than in the previous twenty.

I will keep the fight against tax avoidance high on the agenda, as I did in the last mandate, for example, with my proposals on public country-by-country reporting.

Multinationals must be taxed effectively, so that our citizens and SMEs don’t have to bear an unfair tax burden.

Honourable Members

As a member and vice-president of the European Commission, I have always worked in a spirit of collegiality. That will continue.

Over the past five years, I have worked closely with the European Parliament. If you honour me with your confidence, I would be happy to continue this fruitful relationship.  

The EU and the world stand on the brink of one of the greatest transitions and transformations in history.

Our objective is the same: to deliver an economy that works for people.

Thank you very much for your attention and I look forward to your questions.