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European Commission - Speech - [Check Against Delivery]

Remarks by Vice-President Dombrovskis at the first informal ECOFIN press conference in Sofia

Sofia, 27 April 2018

Thank you, Vladislav, and first of all thank you for the warm welcome we are getting here in Sofia.

Let me start by coming back to the signature ceremony, where we signed the Memorandum of Understanding between the European Commission and the European Stability Mechanism. The Memorandum reflects our shared objectives, which are to safeguard the stability of the euro area and to ensure efficient governance of financial assistance programmes in Member States. This document essentially lays down the close working relations between our two institutions.

Now let me highlight a couple of points we discussed today at ECOFIN, focusing on the deepening of our Economic and Monetary Union.

First, we had a discussion on completing the Banking Union. We have covered this topic on many occasions over recent months, to prepare the leaders' discussions in June. And the truth is - we are starting to run out of time. We need to move beyond established positions now and find compromises. So it is time to decide.

Risk reduction and risk sharing are two sides of the same coin and should go hand in hand. So, I invite Ministers to agree on a general approach on the 2016 Banking package at the May ECOFIN. This should give us solid ground to decide on the backstop for the Single Resolution Fund.

We should also strive for the June summit to give us a clear mandate for a workable backstop. To be workable, the backstop for the Single Resolution Fund should satisfy certain criteria: it should be permanent. It should be efficient; with decision-making that allows a resolution to be completed over one weekend. It should provide certainty on the availability of funds within short notice when those decisions are actually taken by the Single Resolution Board. And it should have a sufficient size.

The last point I wanted to make is on the European Deposit Insurance Scheme (EDIS). Last June, Ministers agreed to start political talks on EDIS once sufficient progress on risk reduction had been achieved. So we hope for progress in June, and our ambition is to possibly agree on the principles of how EDIS could be introduced in phases, and to start political discussions on legislation for the first phase.

We also had a substantial discussion on the Capital Markets Union, starting with a presentation of a paper by Bruegel. This paper clearly outlines the many ways Europe would benefit from more integrated capital markets, and how this could increase private risk-sharing and could support growth in Europe.

We have already achieved some good progress on CMU. We now have legislation to promote venture capital, to enable safe and transparent securitisation, and to make it easier for SMEs to tap capital markets via a reformed prospectus. But there is still long way to go, and our capital markets are facing new challenges.

The CMU is not about one legislative proposal. It should be about systemically putting in place the conditions for a thriving capital market ecosystem, across the whole EU. There are many technical and complex files, but overall they can be summarised as three main objectives:

First, we want consumers and investors to benefit fully from the single market thanks to new EU-wide financial products. For example, we need a quick agreement on a Pan-European Personal Pensions Product, or PEPP. And we need to start work on legislation also to enable crowdfunding platforms to operate across the single market.

Second, we must agree on clearer and simpler rules for our businesses. This was the main idea behind The Call for Evidence, which we are following up through various legislative proposals. And we also call for a quick agreement on our 2016 proposal on business insolvency.

Third, we must agree on a more consistent supervision of EU capital markets – this is where our review of the European Supervisory Authorities comes in.

Well-developed capital markets are a tool to make our economy more resilient, and we should use it.

Thank you very much.


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