Keynote speech at the EESC meeting of the European Semester Group “Reforming the European Semester for a resilient, sustainable and inclusive Europe – Tackling present and future challenges”

(Source: European Commission)

“Check against delivery”

President Schweng,

Chairman Doz,

dear colleagues,

 

Thank you so much for your invitation today. We very much value the work of the European Semester Ad-hoc Group, especially the outreach to civil society, the country visits and the meetings and conferences.

 

By collecting and channelling the views of civil society across Europe, you are making 2 essential contributions to the European Semester.

 

First, the local knowledge of civil society across Europe improves the quality and relevance of the Semester.

 

Second, the involvement of civil society across Europe creates ownership and legitimacy.

 

So my thanks to you, on behalf of the Commission.

 

You gave me 3 questions to answer today. I will start with your first, about creating a permanent instrument on the basis of the Recovery and Resilience Facility  (RRF).

 

The RRF has indeed proven to be a useful instrument for exceptional circumstances. I am proud of our work together on this.

 

In the financial crisis, it arguably took 4 years for Europe to provide a common response. But in the Covid crisis, we had a common response in less than 4 months.

 

This response was based on European ambition and solidarity.

 

Our Recovery Plan, NextGenerationEU, together with the long-term budget,was the largest stimulus package ever financed in Europe. This allowed us to substantially reinforce several policies, such as Cohesion, but also to create a new instrument the Recovery and Resilience Facility to mitigate the economic and social impact of the pandemic and enable a more sustainable, resilient recovery, anchored in a Cohesion legal basis.

 

This is an innovative approach. I would highlight here two elements in particular:

 

First, the combination of investments and reforms, which is decisive for sustainable growth. This is also my experience and my focus as Commissioner for Cohesion and Reforms.

 

Second, the cooperative way in which the national recovery and resilience plans were prepared and negotiated, based on proposals from the Member States themselves.

 

The start was an auspicious one, however, at the beginning of any new policy, there is a very steep learning curve.

 

So I think it is far too early to make any definite pronouncements on the future of the RRF. The first implementation evaluation will only be in 2024, and the final impact evaluation in 2028.

 

I would say at this stage that a discussion about its future is contingent on a successful implementation and this should be our priority. Especially since implementation has been a moving target. The RRF was conceived to help rebound after Covid, but it is now also working to alleviate the impact of the Ukraine crisis and to promote actions under REPowerEU.

 

This is why we are putting our Technical Support Instrument at the service of Member States, to support them in the preparation of the investments and in the delivery of the reforms they have committed to.

 

Finally, I would make the point, from my years of experience, that the key factors in resilience and in crisis preparedness is diversification.

 

The same is true at the policy level. There is no one tool that can tackle all future crises.

 

So what Europe really needs is a broad toolbox, with instruments that have proved their worth. And cohesion policy is one of those tools. We have a proven track record, over many years, of economic development and of productive partnerships with local and regional actors.

 

This has proven vital in these years of crises.

 

And this brings me to your other question: how has cohesion policy fared in these crises?

 

I think that cohesion policy has stepped up and rose to the occasion.

 

Regions under pressure were able to lean on cohesion policy to withstand the pressure of adversities.

 

In Covid, we had the first emergency support on the ground in less than 4 weeks. Through the Coronavirus Response Investment Initiative, we delivered around 23 billion of emergency support, the majority in the first 6 months.

 

Emergency medical supplies, from masks to ambulances, from ventilators to vaccines. And emergency support, both to businesses and to employees and social care workers, to keep businesses afloat and to protect social care.

 

Our response to Covid continued, with REACT-EU, a 51 billion euro investment in relaunching the economic recovery.

 

And now, with the Russian invasion of Ukraine, we have already disbursed over 3.5 billion euros of support through the CARE initiative to help Member States provide services such as temporary accommodation, medical care, and other immediate needs.

 

But we must remember that cohesion policy also makes another, very fundamental, contribution to crisis management: our long-term planning, and our long-term investments, reduce the impact of crises.

 

This is obvious when we invest proactively in flood and fire prevention and early warning mechanisms, as well as the capacity and systems of emergency responders.

 

But it goes further: because our investments in the future economy, through smart specialisation and diversification, will make regions more resilient to crisis in the long term.

 

And our investments in renewable energy and the blue economy, have helped pave the way to increase our energy security.

 

There is a fundamental principle here: in all these crises, we do not only need firefighters during the crisis, we also need to “fireproof the house”, before the crisis hits.

 

And this “fire proofing and future proofing” is what cohesion policy does.

 

I now turn to your final question on rethinking economic governance and adapting the European Semester.

 

The public debate was launched last October, and this discussion has only become more timely with the disruption caused by Russian aggression in the Ukraine.

 

We are using the 2022 Semester cycle to discuss the future with all key stakeholders. And today’s discussion is a useful next step.

 

One key point emerging is appreciation for the process, and especially for the country-specific recommendations. These are widely recognised as an effective way to co-ordinate European economic governance. And indeed, there have been clear impacts in terms of fiscal and reform policies, and solid public investments, which have in turn contributed to a solid, resilient economy.

 

Another strength of the Semester is the incremental process, which has enabled it to respond to both short term and long term economic dynamics. And this has been very useful as we have aligned cohesion policy as well as our reform support to the Semester process.

 

The 2019 and 2020 recommendations were produced for cohesion partners, with cohesion partners. And their quality was such that they were used not only for cohesion programmes, but also as the basis for RRF plans.

 

In the most recent 2022 semester package we had for the first time a dedicated analysis of the regional situation in each Member State. For higher impact and effective policies, we need to combine our macro-economic recommendations with a regional analysis and territorial proofing.

 

I will close by quoting the old proverb: “Beware the person whose only tool is a hammer, because every problem comes to resemble a nail“.

 

Dear colleagues, as we think about future crises, and making Europe more resilient, we need to think, not in terms of one master tool, but instead in terms of many tools, and a well-stocked toolbox.

 

In other words: we need diversification. Diversification of the European economy, towards the future economy, which is the work of cohesion policy, the RRF, Horizon Europe, and other policy tools.

 

We also need diversification in policy tools, and I firmly believe that the proactive fireproofing efforts of cohesion policy and of reforms, as well as our firefighting efforts, make us one of the tools.

 

And we need diversification in partners, not just the usual suspects in the national ministries, but local partners and civil society.

 

And for this diverse mix we are in the right place today. So l look forward to our discussion.

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