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European Commission - Speech - [Check Against Delivery]

Remarks by Vice-President Dombrovskis at the ECOFIN press conference

Brussels, 23 January 2018

Thank you, Minister.

This was the first ECOFIN under the Bulgarian Presidency.

I would like to wish you all the success in hammering out many important agreements.

Today's discussion on completing Europe's Economic and Monetary Union focused on our December proposals.

I welcome the Council's willingness to advance speedily on our two legislative proposals aimed at supporting structural reforms in member states. This concerns amendments to the Structural Reforms Support Programme and the Common Provision Regulation.

On other proposals we will need more discussion rounds at political level.

There is a shared feeling that we need to move forward on EMU deepening now.

There is a strong support for an inclusive approach, which means close involvement of non-euro area countries in the process.

There is also a shared sense of immediate priorities. They are completing the Banking Union and developing further the European Stability Mechanism.

We have often emphasized that on the Banking Union we must move hand in hand on risk sharing and risk reduction.

One important part of the risk reduction effort in the Banking Union is to reduce levels of non-performing loans, or NPLs.

The progress report I presented shows that during the past three years, the share of non-performing loans in the EU had been reduced by one third. This corresponds to a € 300 billion reduction.

As of mid-2017, the NPL ratio stood at 4.6%.

And there's been encouraging progress in EU countries with high rates of NPLs, such as Italy, Spain, Portugal, Slovenia and others.

In March, the Commission will present a package of proposals to help the reduction of NPLs and prevent their accumulation in the future.

Another important element of our discussion was the backstop for the Banking Union. This is one of the key areas where the ESM would have to be developed further, which is the second immediate priority for Ministers.  

Technical work in this field is well advanced.

To move forward, it is now for Ministers to give political steer for the design of the backstop.

Today the Council endorsed economic policy priorities identified for the 2018 European Semester cycle.

The only remark I would have is that the Commission would have wished stronger wording on aggressive tax planning in the conclusions on the Annual Growth Survey.

We want Europe to lead the fight against tax evasion and aggressive tax planning. This goes beyond complying with the existing global norms.

On the tax blacklist: let me recall that this is the list of Member States.

The eight countries, which have made commitments and were removed from the black list, are still on the grey list. That means they have to follow through on their commitments to reform - or they will end up back on the black list.

We think these commitment letters should be made public. We want to enable journalists and civil society to track these eight jurisdictions and hold them to account.

In terms of financial services legislation: I made some suggestions on how the EU should approach cryptocurrencies.

Make no mistake: We want Europe to embrace the opportunities of blockchain, the technology underlying cryptocurrencies.

But to do so, we must be vigilant and prevent cryptocurrencies from becoming a token for unlawful behaviour.

In December I wrote to the European Supervisory Authorities to ask them to update their warnings from a financial stability and investor protection perspective. This will happen shortly.

The updated rules against money laundering, which we agreed on in December, will put cryptocurrency exchanges and custodial wallet providers within the scope of money laundering supervision.

That means less anonymity and more traceability, through better customer identification, and strong due diligence.

I encourage all Member States to transpose the new rules - agreed last month - as quickly as possible.

Crytocurrencies may have ramifications for many other areas, including for central banks. That's why I intend to bring together key authorities and the private sector in a high level roundtable very shortly to assess the longer term situation beyond the current market trends.

Thank you.

SPEECH/18/398

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