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Remarks given yesterday by Commissioner Gentiloni at the Eurogroup press conference.

"Check against delivery"

Good evening. First of all, on the economic situation: the outlook remains positive. The euro area is experiencing a robust recovery in the second quarter. Indications are that the third quarter will likely confirm this positive trend. So, there is a positive and optimistic outlook.

At the same time, certain developments require close attention. In particular, the interplay of rising energy and commodity prices, supply bottlenecks and booming consumer demand are likely to maintain upward pressures on consumer prices in the short-term.

This is the reason why monitoring inflation remains crucial. In September, we had 3.4% inflation. If we look to July, August and September, it shows an increase. Our forecast shows that this will continue before decreasing in 2022. This is why we consider as temporary, these inflation increases. Monitoring it will remain essential. We discussed this afternoon, the recent surge in the wholesale price of electricity. This is due to an extraordinary combination of factors, the most important of which is high global gas demand, especially from Asia, and insufficient supply. Natural gas prices determine electricity prices in most EU countries.

To a lesser extent, electricity prices have increased due to seasonal and one-off factors, such as weather conditions and infrastructure maintenance that was delayed due to the pandemic.

A third factor has been the increase in the carbon price under the EU Emissions Trading System, but this represents only around 20% of the overall electricity price increase. This is also considered to be temporary. The winter season will be essential to understand how temporary it will actually be. In this situation, the Eurogroup was very interested. Coordination is key in the response to this crisis.  

Of course several Member States are already taking steps in response to the rise in energy prices. The Commission will shortly present its analysis of the current situation together with a toolbox of policy measures that can be deployed to mitigate its impact.

It is important for measures to be temporary and targeted, to respect the single market and state aid rules. Crucially, measures must be consistent with the transition to a decarbonised economy – which is the structural response to volatility and dependency on fossil fuels. This is not to undervalue the need for a response and a reaction, which is needed, but to stress the fact that the European Green Deal is not the problem, but it is an important part of the solution.

We also need to enhance our preparedness to similar shocks in the future. Alongside the toolbox for the short term, we will also launch a reflection on how to better secure energy supply for EU citizens and businesses in the medium term.

We also discussed how our common euro area priorities are reflected in Member States' Recovery and Resilience Plans. We have now approved two thirds of them. Just to recall, the euro area recommendations for this year centred on ensuring a positive fiscal stance, avoiding divergence, and moving forward with structural reforms.

So, it's positive that these three aspects emerge very clearly from Member States' plans. The ambitious reforms and investments set out in the plans will support the recovery, through increased public and other capital spending. They will limit the increase of divergence which was one of the main concerns we had when we launched the Recovery and Resilience Facility, by supporting in particular the most vulnerable and hardest hit Member States; and they will increase economic, social and institutional resilience.   

We are now firmly in the implementation phase of the Recovery and Resilience Facility, with the majority of Member States' plans approved and money already flowing to these Member States.

Finally a word on the 11^th enhanced surveillance report for Greece.

Greece is seeing strong signs of economic recovery, supported by the gradual reopening of the economy and a good tourist season, despite the terrible fires that hit the country in August.

The report concludes that Greece has delivered on a number of specific commitments, in particular around privatisation, tax administration, education and public administration. We are expecting further progress this month in the areas of primary healthcare and justice, which we will assess in the twelfth enhanced surveillance report later this autumn.

Thank you.

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