Remarks by Executive Vice-President Dombrovskis at the ECOFIN Press conference

Good afternoon, everyone.

Firstly – on the economic governance review.

As the Deputy Prime Minister indicated, we have made more progress at today's Ecofin.

The Spanish Presidency has been working tirelessly for an agreement and we fully support its ambition to finalise the negotiations before the end of the year.

The EU's future fiscal policy needs clarity and predictability for years ahead.  

And given today's context of high interest rates and significant economic challenges, we need to preserve the sustainability of public finances and provide enough space for investment.

Turning to the EU's economic situation.

While the growth outlook remains subject to exceptional risks and uncertainty, inflation is continuing to decline.

The latest Eurostat flash estimate for the euro area puts inflation at 2.9% in October, down from 4.3% in September.

That said, we are keeping a close eye on energy prices given the current tensions in the Middle East.

While their impact on energy markets has been contained so far, prices could easily rise if the situation escalates.

A lot will depend on how long the conflict lasts and how involved other countries in the region may become.

In general, while EU economies are showing remarkable resilience and labour markets remain strong, the near-term outlook is bleak.

Recent indicators point to continued weakness in the third quarter, when real GDP expanded by just 0.1% in the EU.

We will factor in all the latest developments in our autumn 2023 forecast due on November 15.

I will now turn to Ukraine.

First of all, congratulations are in order for both Ukraine and Moldova after yesterday's recommendation from the European Commission to start accession negotiations.

Let us recall that Ukraine is still a country at war. The fact that it has achieved so much with its reform agenda, while coping with Russia's relentless onslaught, is impressive - to say the least.

On financial support: the EU has been the largest donor to Ukraine this year.

Total disbursements to Ukraine in 2023 under Macro Financial Assistance Plus now stand at €15 billion, and the latest payment was made two weeks ago.

Two more tranches will be made before the end of the year.

However, 2024 will soon be upon us.

Ukraine's financing gap is likely to remain massive.

For the EU's part, we need to make rapid progress with adopting the Ukraine Facility.

The timeline is very tight for starting disbursements to Ukraine from January.

First, we need the Council to approve the Facility. Ukraine needs to submit its plan. It needs to be assessed.

All this takes time.

One possible extra revenue stream could come from immobilized Russian assets.

We welcome last month's G7 agreement in Marrakech to explore using extraordinary revenues arising from Russia's immobilized sovereign assets for supporting Ukraine, its recovery and reconstruction.

As requested by EU leaders, the Commission will now accelerate its work - together with the High Representative – with a view to submitting proposals.

Lastly, the Recovery and Resilience Facility.

The implementation of the Facility is now at full speed.

We expect, if everything goes according to plan, the amount of disbursements to exceed €200 billion by the end of the year.

The European Commission is now assessing 13 modified Recovery and Resilience Plans.

The aim is to get them adopted by the end of the year, also signing the financing and loan agreements so that we do not miss the legal window to commit the remaining RRF funds.

In that regard, I would like to congratulate Austria, Denmark, Lithuania and Sweden for their revised Recovery and Resilience Plans which Ecofin adopted today.

All of those plans include a REPowerEU chapter.

While we see some acceleration in implementing the RRF, there is still much to do.

We also need to deal with backlogs. Towards the last years of the RRF's timeline, we should avoid an accumulation of payment requests and funding needs.

I will conclude here – thank you.