Remarks by Commissioner Gentiloni at the Eurogroup press conference

Good evening to everyone. Let me start from the exchange of views with the IMF that we had this afternoon. It was an occasion for us also to take stock of the developments on the economic outlook.

You know that the euro area economy remains resilient, but in a context of persistently uncertainty, as demonstrated also by the downward revision of GDP figures for the first quarter for a handful of Member States.

On the positive side, we still have encouraging strength in the labour market: in the first quarter of the year, employment grew by 0.6% in the euro area. If we put this in relation to the pandemic, we now have five million more people in work than in the fourth quarter of 2019. Five million.

Energy prices, headline inflation and now also core inflation have been falling, though at 6.1% in May, headline inflation remains high. So it's key that fiscal and monetary policy pull in the same direction – as we always repeat, Paschal, in our meetings. But I think this is the message that we have to continue to give.

As the President of the Eurogroup said, Kristalina Georgieva will present tomorrow morning the findings of the IMF's Article IV report on the euro area. What I can say this evening is that our views are very much aligned, not just on the economic outlook but also on the policy priorities. This is good in such an uncertain moment and situation. And I particularly welcome the Fund's support, also expressed on several previous occasions, for our proposals on economic governance reform.

A brief word on the digital euro, which is of course a complex topic.

We have engaged extensively with Member States and stakeholders over the last year and a half, as well as with the ECB of course. We are now in the final stages of preparing a proposal for a regulation enabling the establishment of a digital euro in the future.

We are aiming to present this proposal at the end of this month, so I will not enter into details now. I will only recall that it will be a balanced proposal, accompanied by a separate regulation on the legal tender status and access to euro cash. Because the digital euro is about giving one further option for citizens to pay in euros: it is not about replacing cash, but complementing it. And on this we are crystal clear.

Finally, we had a good and forward-looking discussion on the performance of European capital markets and on our ongoing project of Capital Markets Union.

There is some encouraging progress in some areas: for instance, European firms gradually increased their use of market-based funding and SMEs are increasingly able to rely on alternative sources of funding.

At the same time, households' participation in the capital markets has hardly improved, despite many efforts in this area. Our levels of venture capital investment continue to be far below those in the US and other parts of the globe. This was interesting in the figures that both the IMF and ECB, and the Commission, gave to Ministers. And also the level of equity issuances on EU exchanges is still low, and far below that in the US.

So we all agree that building the CMU remains a work in progress and that we need to urgently step up our efforts.

On this note, let me mention that I will present a legislative proposal on Monday to make withholding tax procedures simpler and faster – one of the issues universally viewed as a major obstacle to cross-border investment. This will mean that by the summer, the Commission will have completed all the actions in our 2020 CMU Action Plan.

Thank you.