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Ladies and gentlemen,

It’s a great pleasure to be with you today – though it’s a great pity that we can’t have these really vital discussions face to face, about how to manage the crisis and accelerate the recovery.

It’s an especially important question, because right now, we’re experiencing yet another wave of this devastating pandemic that’s already taken more than five million lives, and plunged us into the deepest recession in a century. And ahead of us is still the challenging task of renewing our economy for a green and digital future.

To square this circle, we have to use all our tools of economic policy in careful harmony. We’ll have to draw on all the sources of investment we can – from banks and corporations, from European and national budgets – and make sure that those different types of finance complement each other.

So this Congress comes at a very timely moment. And your discussions today will make an important contribution to helping Europe prepare for the challenging future ahead of us.

Of course, the first step towards a strong recovery is to meet the crisis in the right way. Because not all solutions are equal. Some give us a momentary respite, only to leave us weak and drained of energy. Others help us preserve and even strengthen the forces that we need to recover. That’s why, when we face a crisis, we need to tackle the crisis in the way that will best prepare us for the future.

Often we’re told that companies’ survival depends on us looking the other way as they form crisis cartels, or carry out mergers that create a monopoly, or get State aid without any conditions.

But that strips our economy of exactly the assets that we need, for a quick and strong recovery. Competition makes European businesses strong – it keeps down prices, it makes supply chains more resilient by preserving real choice. And it keeps markets open for innovative companies to grow and succeed. That is one of the main messages of the Commission’s Communication on a competition policy adopted yesterday.

When the pandemic struck in the spring of last year we quickly put a Temporary Framework in place that gave EU governments the room to support their economies through the crisis – while preserving competition and the Single Market.

Since then, we’ve taken some 675 decisions, approving a total of more than three trillion euros of State aid, in every country in the EU.

The aid comes with strings attached. For instance, on the amount of State aid that any one company can get, and on how long subsidised loans and state guarantees can stay in place. It encourages aid to be given through schemes that are available to any company that meets the conditions, instead of being given to just a few selected companies. Also, there are extra, much stricter, conditions for bigger interventions that threaten competition more – like capital injections by the State to save big companies from insolvency.

For instance, few industries in Europe have suffered so badly from the pandemic as the aviation sector – and the 33 billion euros of aid approved under the Framework have played a major role in keeping airlines afloat. At the same time, our rules have protected fair competition. Two big airlines – Air France and Lufthansa – have had equity from the State. But they also had to agree to tough conditions in return. For instance giving up take-off and landing slots at busy airports like Frankfurt, Munich and Paris Orly to competitors. It’s also included measures to encourage the aid to be paid back as soon as possible – and in fact, Lufthansa has just announced that it repaid most of the State support.

The evidence that we have so far also suggests that the rules have been effective in preserving a level playing field. Since September last year, we’ve carried out three surveys and asked EU governments how much of the approved aid has actually been spent. We are still going through the data of the latest survey. But the results so far show that overall, governments have only spent about a third of the amounts we’ve approved. No one EU country has outspent others, compared to its size. And the spending seems to be justified compared to the seriousness of the downturn in the country.

The Temporary Framework has worked together with the efforts of national governments and the private sector – including the vital support that banks have given, to help companies stay in business and raise the cash they need to survive. And as a result of all those efforts, the crisis of the last two years hasn’t been marked by a wave of insolvencies on anything like the scale that we usually see in a downturn. And the banking sector, too, has remained stable in spite of the very challenging economic situation.

The economic outlook is still deeply coloured by uncertainty. The pandemic is still with us – and new waves of the virus are still forcing governments to tighten restrictions. But as our economies begin to grow again – by some 5% this year – we need to make sure that our rules offer Europe a path from crisis management into recovery.

On the one hand, we can’t, from one day to the next, just turn off the support that keeps companies in business. A cliff edge preventing public support before private markets are ready to pick up the slack would risk setting off the chain of bankruptcies that we’ve managed to avoid.

On the other hand, it’s also important that we don’t keep crisis measures in place for longer than needed. They do a great job of providing a safety net, keeping things from getting worse for businesses . But ultimately, it’s not enough to just fix things in place. We need to be prepared to make our economy fit for the green and digital future.

And that’s the balance in the 6th amendment of the Temporary Framework.

We’re starting the process of phasing out the crisis support. By extending the existing provisions of the Framework for six months, until the end of next June, we’re giving governments the time that they need to gradually end public support.

At the same time, we’re helping to kick start the process of bringing back private investment after the crisis. So that, as public support fades out, private funding will fade in – and European businesses won’t face the risk of falling into a gap between the two.

So, the revised Temporary Framework will allow governments to give aid to support private investments that will help us recover the ground we’ve lost in the past two years.

We want to provide the foundation that gives businesses the confidence to start investing again. With room for higher public contributions to crowd in investments by small and medium-sized businesses, in the poorer areas of Europe, or if support is repayable.

The new rules will also help governments use State aid to get businesses back on a stable financial footing. They will help smaller businesses raise equity, to fill the gaps which the crisis has left in their balance sheets. This support will have to be given through guarantees to private funds that are raising new money to invest in smaller European businesses.

We’re also putting a broader framework in place, for the funding that will support the economic renewal for the green and digital future.

We’ll soon adopt new rules on State aid for the climate, energy and the environment. We will expand their scope to enable aid  for the full range of goals of the Green Deal, such as clean mobility, energy efficiency and circularity. They will also facilitate support for industries to meet the challenges of the green transition. These new rules will provide a fit-for-purpose framework with in-built flexibilities – along with tighter conditions to ensure it’s in line with the principle that aid should “do no significant harm” to the climate and the environment, and that it doesn’t distort competition.

We’re also planning to make our rules on State aid for important projects of common European interest even more effective and inclusive. In recent years, those rules have helped governments across Europe come together with industry, to jointly invest as much as 25 billion euros in breakthrough innovation in vital areas like microchips and batteries. And new projects are in the pipeline, to support the infrastructure and innovation that we need, to use hydrogen to help us decarbonise industry and transport.

At the same time, we’re also revising our rules so they fully support the digital transition. For example, updating the guidelines on how governments can invest in expanding broadband networks to places that the private sector alone wouldn’t cover. Not just through fixed networks, but also, in some cases, by supporting the 5G mobile networks that will help deliver advanced new digital services.

There’s hardly an industry these days that doesn’t need chips – as we’ve seen in recent months, with car production lines across the world being shut down by a global shortage of these semiconductors. Their relevance will only increase as our economy becomes more digital. In these exceptional circumstances, we may envisage approving public support, to set up new chipmaking facilities that are the first of their kind in the EU. Provided, of course, that any such aid is limited and doesn’t harm competition. And the benefits of this exceptional support for such a critical sector will have to be shared without discrimination across the European economy.

Of course, European policy isn’t just about making space for national and regional governments to invest their own resources. It’s also about using our scale as a Union, to help raise the money to pay for renewing our economy.

Just last month, we raised 12 billion euros for green investments, by issuing the world’s biggest ever green bond. And  in the next five years, we’re planning to raise as much as 250 billion euros by issuing green bonds. And together with 550 billion euros of other borrowing, that money will allow us to support green and digital investment, through our recovery programme, NextGenerationEU.

The centrepiece of that is our Recovery and Resilience Facility, which will make more than 670 billion euros available to support Europe’s recovery. Of that money, at least 37% should go to help tackle climate change, and at least 20% to support the digital transition. And many countries have gone far beyond those minimums. In Germany, for instance, more than half the money will go towards digitisation And more than 40% of the German share of the fund will go to green investments in hydrogen, electric cars and energy-efficient homes.

As we start to renew our economy for a green and digital future, we face some serious challenges. But with the right focus – and especially the right funding – Europe can turn those challenges into opportunities.

There will be opportunities for banks, to invest in projects with a bright future. Opportunities for businesses, all over Europe, to innovate and grow in a fair, open, competitive Single Market. And most of all, opportunities for the people of Europe, to live the secure, happy, healthy lives that a vigorous green and digital European economy has to offer.

Thank you.