Opening remarks by Executive Vice-President Valdis Dombrovskis at the ECOFIN press conference

Thank you minister, good afternoon everyone.

We have just concluded the first ECOFIN meeting under the Swedish Presidency.

Elisabeth, I wish you and your team every success in steering through many important files in the coming six months.

The economic impact of Russia's war against Ukraine will clearly continue to dominate our agenda.

We see no signs of any let-up in Russia's aggression.

Over the weekend, we saw how Russia is bombing residential buildings in the city of Dnipro.

I would like to express my deepest condolences to Ukrainian families who have lost relatives and friends.

The EU must continue to put pressure on Russia to reduce its ability to produce weapons and finance its war machine.

The longer that this war continues, the higher the cost will be - for Europe and the world.

We are moving ahead with macro-financial assistance for Ukraine in 2023, as agreed at our meeting in December.

I signed the Memorandum of Understanding yesterday - on behalf of the EU - to set out the conditions and terms of reference for the loans.

These conditions include reforms relating to Ukraine's fight against corruption, strengthening the rule of law and in the energy sector.

The first disbursement - €3 billion – is being paid out today, without conditions, to help Ukraine cover its most pressing needs.

It will be crucial to help Ukraine to get through this winter.

And looking ahead, we envisage a stable flow of financing of around €4.5 billion per quarter.

More broadly, we remain in an environment of great uncertainty.

We welcome the Presidency's focus on driving forward economic growth to meet the EU's long-term challenges, to:

• keep advancing with the green transition and work towards energy independence
• stay the course with reforms and investments
• strengthen the resilience and competitiveness of our industry and companies.

High inflation, interest rates and energy prices have left many people and companies struggling. These combined negative factors are curbing consumption, production and investment.

They require a consistent policy response:

building on our key strengths, keeping our long-term policy agenda intact and ensuring and fiscal and monetary policy do not contradict each other.

However, while the situation remains difficult, there have been some positive developments since the Commission's autumn economic forecast.

They suggest that the contraction of economic activity at the turn of the year may not be as steep as we projected before.

Oil and gas prices have fallen below the levels that we assumed in the autumn. It is thanks to our full gas storage and the relatively mild winter is helping, and we also see that the price cap imposed on Russia's oil is working successfully.

Labour markets remain strong.

Inflation may have peaked.

And while survey data remains historically weak, there are signs of improvement of economic sentiment as well.

All this will be reflected in the Commission's winter economic forecast, which we will present early next month.

While there is some positive news, as I said, there is no room for complacency.

There is no time to lose for Member States to put the reforms and investments set out in their Recovery and Resilience Plans into full effect.

This year should be the peak year for RRF disbursements.

Implementation should proceed along with any revision of national plans, also to include RePowerEU chapters to boost the EU's drive towards renewables and energy independence.

We rely on the Swedish Presidency to drive this forward and make full use of the synergies between the Recovery and Resilience Facility, the European Semester, and REPowerEU.

In that context, I welcome ministers' approval today of the revised plan submitted by Luxembourg.

While we will continue our close coordination of fiscal, economic and social policies via the European Semester, it is worth mentioning that the economic governance review will enter an intensive phase during the Swedish Presidency.

Since the Commission plans to present its legislative proposals in a few months' time – in spring – it will be important to reach the largest possible consensus by the European Council in March.

A last point, as the minister mentioned, on the U.S. Inflation Reduction Act, where I updated ministers on where the EU stands.

As you know, this has generated a lot of debate in Europe.

We have raised our concerns about the effects of the Inflation Reduction Act on the competitiveness of EU companies and risks of relocation.

We continue our engagement at all levels with the Biden Administration, including through a dedicated joint task force.

We want to work jointly with the U.S. on climate change.

And we do not want to see investments in clean strategic sectors leak away from Europe – which would weaken the European economy.

So we are engaging with the U.S. to find a practical solution on this, and also working on a broader European policy response in this regard, which the European Commission intends to put forward on February 1.

An additional point concerning the Inflation Reduction Act: later today, I will be meeting U.S. Trade Representative Katherine Tai here in Brussels to discuss this, along with other topics.

Thank you.