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2022-03-16 at 9h43

The EU must create a joint investment-focused fiscal policy instrument

Portuguese Prime Minister António Costa at the high-level conference on the Recovery and Resilience Mechanism, Brussels, 16 March 2022

The Portuguese Prime Minister António Costa claimed that the European Union (EU) must create a joint investment-focused fiscal policy instrument.

During his speech at the high-level conference on the Recovery and Resilience Mechanism, António Costa said that the Covid-19 crisis allowed us to break "a barrier that seemed impossible to move: mobilising common financing, at the scale Europe needs".

At this "time of absolute exception" due to the war in Ukraine, the staggering rise in energy prices, the rupture of many value chains, and global uncertainty, the Prime Minister noted the need for the EU to have permanent instruments and the mobilisation of common resources.

"Investment is the basis of present and future prosperity" 

António Costa also stated that "investment is the basis of present and future prosperity" and that "it is possible to develop joint solutions that foster the Union’s prosperity and that of each of its members". He added that "it has only been possible to set up the Recovery and Resilience Mechanism because, for the first time in history, the European Commission issued debt that will be refunded via own revenue".

According to the Prime Minister, this is the best way to foster investments that are crucial to future growth, online the rule on "exempting certain investment expenditure for deficit accounting", as this does not strengthen convergence due to the asymmetrical budget capacity of the different member states.

Although the rules are essential to the "European Union’s proper functioning", António Costa noted that they must be applied "in an intelligent way". In this sense, the Prime Minister praised the Commission’s recent communication on the fiscal policy guidelines, to open the door to suspending the fiscal discipline rules in 2023 given the growing uncertainty.

Joint and permanent stabilisation instrument to respond to crisis

António Costa also noted the need for a "joint and permanent stabilisation instrument to respond to crisis", for which the SURE mechanism may act as a model, and which allows the EU to "act in a swift manner" as a pillar for stability and confidence, given the crisis whose nature will be diverse". 

"Our task is clear and we do not have time to lose. The uncertainty we live in and the urgency of the climate and digital transitions show that this is the time for us to follow on the path we trailed, together, during the pandemic crisis. A path of true Union, a beacon of hope in defence of our values and our populations’ well-being", he concluded.


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