MEPs voted for changes at the European Commission, more ambitious climate targets, and discussed the rule of law in EU countries during the 5-8 October plenary session in Brussels.
On Wednesday, Parliament approved the appointment of Mairead McGuinness as commissioner for financial services, financial stability and the Capital Markets Union as well as Executive Vice-President Valdis Dombrovskis’ change of portfolio to include responsibility for trade.
MEPs called on Wednesday for reinforcement of the rule of law across Europe through a new mechanism linking receipt of EU funds by a member state to respect for the rule of law. In a separate vote, they called for EU values to be fully and unconditionally respected in Bulgaria.
All EU countries must become climate neutral by 2050, MEPs said in a vote on the EU climate law. Parliament also called for a 2030 emissions reduction target of 60% (compared to 1990 levels) and an interim target for 2040 to ensure the Union is on track to reach its mid-century goal of climate neutrality. In a separate vote, MEPs called for the EU to promote forest management models that ensure forests are environmentally and economically sustainable.
Members also discussed Brexit and the economic recovery in a debate with Council President Charles Michel on last week’s EU summit and the upcoming one on 15-16 October.
On Thursday, MEPs called for EU countries to take stronger action to counter the impact of the Covid-19 crisis on young people by ensuring that those who register for the Youth Guarantee schemes are offered “good-quality, varied and tailored jobs, training or internships”.
Regarding Brexit, MEPs endorsed two proposals on Thursday concerning the Channel Tunnel with the goal of maintaining the same set of rules governing the whole railway tunnel once the UK has the status of a third country.
This week’s plenary also approved a deal struck with the Council on common rules to boost EU crowdfunding platforms and protect investors. The new single set of rules aims to help crowdfunding services function smoothly across the internal market and to foster cross-border business funding.
On Thursday, with public health in mind, MEPs objected Commission proposals on food products containing titanium dioxide and acrylamide.
Compliments of the European Parliament.
The post Plenary highlights: Commission changes, EU budget and climate law first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.

October 06, 2020 | Speech by Kristalina Georgieva, IMF Managing Director | Washington, D.C.
As prepared for delivery
1. Introduction: A World Turned Upside Down
Dear Minouche, thank you for the warm welcome! I am honored to celebrate with all of you the 125th anniversary of the London School of Economics. It is a proud moment for the students and faculty, and for the alumni.
As an alumna of LSE and as Managing Director of the IMF, I know that our institutions share so many of the same values. I was reminded of that last year, when I saw a large new sculpture—the globe—on the LSE campus. We are connected by our global perspective, by caring deeply about the world we live in and its future.
Mark Wallinger’s sculpture could not symbolize any better what we are facing today: our world is turned upside down by the pandemic—by the loss of more than a million lives, by the economic impact on billions of people. In low-income countries, the shocks are so profound that we face the risk of a “lost generation.”
To confront this crisis, we can take inspiration from a previous generation. William Beveridge, a former LSE Director, issued his famous report in 1942, which led to the creation of the UK’s National Health Service. And in 1944, John Maynard Keynes and Harry Dexter White led the establishment of the Bretton Woods system—including the IMF and the World Bank.
They forged a better world in the worst possible moment, in the midst of war. We need the same spirit now for the post-pandemic world—build one that is more inclusive and more resilient.
That will be the focus of the IMF’s 189 member countries when we meet in our virtual Annual Meetings next week. It is what I will concentrate on today.
2. Global Outlook: The Long Ascent
First, let’s look at the economic picture. Global economic activity took an unprecedented fall in the second quarter of this year, when about 85 percent of the world economy was in lockdown for several weeks.
The IMF in June projected a severe global GDP contraction in 2020. The picture today is less dire. We now estimate that developments in the second and third quarters were somewhat better than expected, allowing for a small upward revision to our global forecast for 2020. And we continue to project a partial and uneven recovery in 2021. You will see our updated forecast next week.
We have reached this point, largely because of extraordinary policy measures that put a floor under the world economy. Governments have provided around $12 trillion in fiscal support to households and firms. And unprecedented monetary policy actions have maintained the flow of credit, helping millions of firms to stay in business.
But some were able to do more than others. For advanced economies, it is whatever it takes. Poorer nations strive for whatever is possible.
This gap in response capacity is one reason why we see differentiated outcomes. Another reason is the effectiveness of measures to contain the pandemic and restart economic activities. For many advanced economies, including the United States and the Euro Area, the downturn remains extremely painful, but it’s less severe than expected. China is experiencing a faster-than-expected recovery. Others are still hurting badly, and some of our revisions are on the downside.
Emerging markets and low-income and fragile states continue to face a precarious situation. They have weaker health systems. They are highly exposed to the most affected sectors, such as tourism and commodity exports. And they are highly dependent on external financing. Abundant liquidity and low interest rates helped many emerging markets to regain access to borrowing—but not a single country in Sub-Saharan Africa has issued external debt since March.
So, my key message is this: The global economy is coming back from the depths of the crisis. But this calamity is far from over. All countries are now facing what I would call “The Long Ascent”—a difficult climb that will be long, uneven, and uncertain. And prone to setbacks.
As we embark on this “ascent,” we are all joined by a single rope—and we are only as strong as the weakest climbers. They will need help on the way up.
The path ahead is clouded with extraordinary uncertainty. Faster progress on health measures, such as vaccines and therapies, could speed up the “ascent”. But it could also get worse, especially if there is a significant increase in severe outbreaks.
Risks remain high, including from rising bankruptcies and stretched valuations in financial markets. And many countries have become more vulnerable. Their debt levels have increased because of their fiscal response to the crisis and the heavy output and revenue losses. We estimate that global public debt will reach a record-high of about 100 percent of GDP in 2020.
There is also now the risk of severe economic scarring from job losses, bankruptcies, and the disruption of education. Because of this loss of capacity, we expect global output to remain well below our pre-pandemic projections over the medium term. For almost all countries, this will be a setback to the improvement of living standards.
This crisis has also made inequality even worse because of its disproportionate impact on low-skilled workers, women, and young people. There are clearly winners and losers—and we risk ending up with a Tale of Two Cities. We need to find a way out.
3. The Path Forward: Confronting the Crisis and Pushing for Transformations
So, what is the path forward? We see four immediate priorities:

First, defend people’s health. Spending on treatment, testing, and contact tracing is an imperative. So too is stronger international cooperation to coordinate vaccine manufacturing and distribution, especially in the poorest countries. Only by defeating the virus everywhere can we secure a full economic recovery anywhere.

Second, avoid premature withdrawal of policy support. Where the pandemic persists, it is critical to maintain lifelines across the economy, to firms and workers — such as tax deferrals, credit guarantees, cash transfers, and wage subsidies. Equally important is continued monetary accommodation and liquidity measures to ensure the flow of credit, especially to small and medium-sized firms—thus supporting jobs and financial stability. Cut the lifelines too soon, and the Long Ascent becomes a precipitous fall.

Third, flexible and forward-leaning fiscal policy will be critical for the recovery to take hold. This crisis has triggered profound structural transformations, and governments must play their role in reallocating capital and labor to support the transition. This will require both stimuli for job creation, especially in green investment, and cushioning the impact on workers: from retraining and reskilling, to expanding the scope and duration of unemployment insurance. Safeguarding social spending will be critical for a just transition to new jobs.

Fourth, deal with debt—especially in low-income countries. They entered this crisis with already high debt levels, and this burden has only become heavier. If they are to fight the crisis and maintain vital policy support; if they are to prevent the reversal of development gains made over decades, they will need more help—and fast. This means access to more grants, concessional credit and debt relief, combined with better debt management and transparency. In some cases, global coordination to restructure sovereign debt will be necessary, with full participation of public and private creditors.

In all these areas, our member countries can count on the IMF. We will help them all the way up the mountain. We will strive to be their ‘sherpa,’ We will help show the way with sound policy advice. We will provide the training some may need. And above all, we will be there with financial support and help ease the debt burden for those who otherwise may not make it.
We have provided financing at unprecedented speed and scale to 81 countries. We have reached over $280 billion in lending commitments—more than a third of that approved since March. And we are ready to do more: we still have substantial resources from our 1 trillion in total lending capacity to put at the service of our members as they embark on their “ascent.”
Again, this will be a difficult climb. It requires new paths up the mountain. We cannot afford simply to rebuild the old economy, with its low growth, low productivity, high inequality, and worsening climate crisis.
That is why we need fundamental reforms to build a more resilient economy—one that is greener, smarter, more inclusive—more dynamic. This is where we need to direct the massive investments that will be required for a strong and sustainable recovery.
New IMF research shows that increasing public investment by just 1 percent of GDP across advanced and emerging nations can create up to 33 million new jobs.
We know that, in many cases, well-designed green projects can generate more employment and deliver higher returns, compared with conventional fiscal stimulus.
We also know that an accelerated digital transformation is underway, promising higher productivity and new jobs with higher wages. We can unlock this potential by retooling tax systems and investing in education and digital infrastructure. Our goal must be for everyone to have access to the internet and the skills to succeed in the 21 st century economy.
4. Conclusion: Keep Climbing!
All this can be done—because we know that previous generations had the courage and resolve to climb the mountains they faced. It is now our turn; this is our mountain.
As one climber put it: “Every mountain top is within reach if you just keep climbing.”
The same goes for the Long Ascent and the polices needed to move forward. Joined by a single rope, we can overcome the crisis and achieve a more prosperous and more resilient world for all.
Thank you very much!
Compliments of the IMF.
The post IMF | The Long Ascent: Overcoming the Crisis and Building a More Resilient Economy first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.

Published on 10/07/2020 19:00 in Banque de France | Speech – François Villeroy de Galhau, Paris Europlace International Financial Forum |
Ladies and Gentlemen,
It is my pleasure to conclude this Europlace International Financial Forum, and to congratulate Chairman Augustin de Romanet and his team for having overcome all obstacles. Today, Paris is, thanks to you, a financial capital of Europe…. and it is more than a short-lived satisfaction, it is a lasting and collective success. The title of today’s session – “From crisis to recovery…” – reminds us of a quote from Hannah Arendt: “a crisis becomes a disaster only when we respond to it with preformed judgments, that is, with prejudices.[i]” Today crises are multifaceted and our duty as policymakers is to prevent them from turning into disasters. To this end, we have to put aside prejudices and come up with concrete solutions. In my speech today, I will focus on two short-term challenges: Brexit obviously, and perhaps more surprisingly the future of Europe payments.
I. Preparing for Brexit: a top priority
Brexit is a burning and unavoidable issue. I will not comment on the UK’s domestic politics nor on the ongoing negotiations with the EU. But amidst all this deep fog, one thing remains clear: achieving a fair and well-balanced Brexit deal would be in the economic interest of first and foresmost Britain but also the EU.  But what is at stake for the EU is nothing less than preserving the integrity of our single market and its competitiveness. In this regard, EU countries should maintain consistency in regulatory practices vis-à-vis all third countries – including the U.K.
Even if there is a trade deal, which I do still wish and hope, Britain will have left the single market and hence things will change anyway significantly for financial services. It means that firms operating under the European passport must quickly finalise their relocation to the EU if they want to operate here as of next year. As of September, the ACPR authorised 43 entities to ensure continuity of activities in France, including 4 credit institutions, 21 investment firms and 7 third country branches. If we include asset relocations of French groups from their branches in the UK, approximately 150 billion euros in assets will have been relocated to France by the end of this year. In addition, 31 entities, mainly investment firms, have applied for a license in France and their projects are currently being assessed by the ACPR. All these are good news, but let me bring two matters to your attention. A handful of small firms, notably in payments electronic money and investment, must urgently accelerate the process or risk being caught out in January. Concerning European major institutions, the EU will not permit empty shells with only partial relocation of staff or booking arrangements. What has been agreed on with the SSM – within the framework of Target operating models (TOM) – in relation to the relocation of staff and assets has to be implemented at once and in any event before the end of this year.
Regarding CCPs, equivalence decisions by the Commission will ensure continuity of access to UK CCPs after 31 December 2020, until 30 June 2022. Beyond this transition, it is key to address the financial stability risks stemming from an excessive dependence on UK CCPs. The 18 month limited equivalence decision aims to give market participants the time needed to reduce their exposure to UK CCPs that are systemically important for the Union. This timeframe will also be used by ESMA to conduct a comprehensive review of the systemic importance of UK CCPs to the Union as foreseen by EMIR 2.2. This will include a fully reasoned assessment whether some of the clearing services are of such substantial systemic importance that the CCP should for euro-denominated activities be relocated on the continent. Considering the size and the concentration of some of these clearing services, betting on the status quo would be a losing proposition, including for clearing members: a swift relocation is in the interest of all participants and relies as such on the attractiveness of the clearing offer that EU CCPs are encouraged to build in order to help the emergence of a new liquidity pool.
Clearly, Brexit is, and will remain, bad news mainly for the United Kingdom, but also for Europe. Yet Brexit also represents an opportunity to restructure the European financial system. The euro area starts with strong assets: an effective monetary Eurosystem, the legal framework for a single financial market and essential components of a Banking Union. However we do not yet have a “financial Eurosystem” with strong pan-European financial institutions and market infrastructure. There is at last a move in favour of banks consolidation in the euro area, which I always supported. The ECB fostered it with its welcome proposal on the recognition of badwills. But beyond domestic consolidations in some jurisdictions where it is not yet entirely done, we need more cross-borders ones; it should be part of a real Banking Union. On markets, let’s be clear: there will not be a single City for the continent, but rather an integrated polycentric network of financial centres, with specialisations based on areas of expertise. A polycentric system of this nature can clearly function, as illustrated by the United States: New York’s financial centre is favoured by corporate and investment banks, Chicago’s financial centre handles futures, while Boston specialises in asset management. Likewise, Paris is well qualified to become the “market hub” of this new European constellation. France will be the biggest capital market in the EU on the other side of Brexit. According to a recent study by the British Think Tank New Financial, it will take the lead in the EU in 14 of 30 sectors studied[ii].
This polycentric structure would improve the circulation of the abundant savings in the euro area – a surplus amounting to EUR 360 billion last year – channelling them towards financing needs on the continent. Besides, euro area businesses have been lacking equity financing for many years now. The Capital Markets Union – and what I more broadly call a “Financing Union for Investment and Innovation” – is even more essential given the prospect of Brexit. European governments all agree in principle; but so far it remains a blind spot in the recovery strategy. Let us at last turn words into action.
II. Preparing Europe payments for the digital currency age
Payments are not a usual topic for Europlace and distinguished financial forums. Indeed, they used to be considered as technical, back-office and even boring stuff. But a revolution is underway, and if we collectively miss it, it would mean a massive disintermediation of banks in the two key assets linked to payments: daily customer relations, and personal data. And it would also mean a major loss of sovereignty for Europe. To this day, the coexistence and complementarity of central bank and commercial bank money as settlement assets has structured the payment landscape. Yet this structure is increasingly being questioned. The development of cheap and innovative digital payment solutions is leading to a decline of the use of cash in transactions, and an increase of cashless payments, which leads to a wider use of commercial bank money.
Besides, our European ecosystem has become critically dependent on non-European players – already major global card-schemes, and more and more Bigtechs – with little control over business continuity and data protection. Meanwhile, the development of crypto-assets and so-called “stablecoins” aims to create a new category of settlement assets. Stablecoins may compete against both commercial and central bank money, even though they do not offer the same guarantees in terms of credit risk, liquidity, service continuity, and neutrality.
Indeed, current digitalisation triggers at least two important risks: (i) the risk that BigTechs will build private financial infrastructures and “monetary” systems, competing with the public monetary sovereignty; and (ii) the symmetric risk that some jurisdictions judge that the only way to respond to the overwhelming private payments’ wave would be to issue and spread on a domestic but also a global basis, “their” CBDCs (Central Bank Digital Currency).
I already called – including here at Europlace – for a holistic European payments strategy. The good news is that in the last months we made decisive progress in designing it, thanks to the commitment of the Commission and the ECB. Christine Lagarde as President, and Fabio Panetta as Board’s member in charge of payments changed the game through their personal involvement. There are three key elements:
1/ A European regulation of stablecoins, as drafted by the European Commission. This so-called “MiCa” has two strengths: its rightly speaks of “Crypto-assets”, and not “Crypto-currencies” which is a misleading expression. And on substance, the draft requires a strict and dual supervision – by national authorities and EBA – to ensure consumer protection and financial stability in a fair and consistent way within the European single market.
2/ A European acceleration on CBDC, which is not yet a decision, as published by the ECB last Friday.
As a principle, central banks need to have an in-depth understanding of innovation and shouldn’t be afraid to “learn by doing”. The Banque de France is now engaging with the innovators from the private sector to conduct a program of 8 experiments on wholesale CBDC.
We, the ECB and the Eurosystem, need to be ready to issue a money in digital form in case of need. Let me be clear: we cannot allow ourselves to lag behind on CBDC. That may mean that we create if necessary a retail CBDC, in order to ensure the accessibility of central bank money for the general public, in particular in countries where the use of cash in payments is declining. And it may mean also that we decide to issue a wholesale CBDC, with the aim of improving the functioning of financial markets and institutions. Within the Eurosystem, the ECB has established a high-level task force (HLTF) therefore, and just published its report.
We will now in parallel (i) engage actively in a public consultation from next Monday, (ii) study within the HLTF all the regulatory, technical, financial stability issues, (iii) start experimentations within NCBs, of which the Banque de France intends to be an active contributor including in Retail CBDC. Following this “three-tracks approach”, towards mid-2021 the Eurosystem will decide whether to launch a digital euro project, which would start with an investigation phase. Whatever the decision, it would complement cash, not replace it. The Eurosystem, the Banque de France, will never abandon cash, as it is part citizen’s freedom in choosing their means of payments, and hence their trust in the currency.
3/ A European mobilisation on private payments infrastructure, thanks to the engagement of major European banks – including French ones – in the so-called “European payments initiative” (EPI). We definitely need to go beyond existing national schemes, and offer cross-border solutions and a pan European brand. EPI needs to be detailed, opened up to other banks and jurisdictions, and  accelerated. But it definitely warrants the full support of the Eurosystem. We should additionally ensure that efficient public infrastructure such as TIPS is compatible.
Let me stress that there is no contradiction between considering a euro-CBDC and supporting EPI. We may probably need both, and we should in any case build them to be complementary. My preference would be to seek a renewed public/private partnership for the dissemination of central bank money in a retail form. Possible impacts on the banking sector could be reduced with different tools: for instance, limiting the quantity of digital euro in circulation, and distributing it through commercial banks.  Validating such an intermediated model would provide enough customer proximity and value added to intermediaries (like front-end solutions).
The good news is that we now have a consistent European payments strategy. The challenge is that we have to implement it. The challenge is to deliver. And we do not have much time to win the battle – one to two years. This sense of urgency should lead us all to collective action now.
As a conclusion, allow me to say a few words on French banks. They entered the crisis with a sound financial situation both in terms of solvency and liquidity. They provided with great efficiency the vital liquidity shield that companies needed during the acute phase of the crisis. We, as supervisors, acted with pragmatism by easing some regulatory constraints. But pragmatism doesn’t mean laxity. Strong challenges are still ahead, including risk monitoring – as we are not yet out of the Covid crisis –, digitalisation, and improved profitability. But that is another story… that we might discuss together another time. Thank you for your attention.
Contacts:

Mark Deen | mark.deen[at]banque-france.fr

Déborah Guedj | deborah.guedj[at]banque-france.fr

Compliments of the Banque de France.

[i] Hannah Arendt “The Crisis in Education”, The Crisis of Culture.
[ii] Panagiotis Asimakopoulos, “What do EU capital markets look like on the other side of Brexit? – Analysis of the size and depth of capital markets in the EU27”, New financial, September 2019

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October 06, 2020 | Speech by Jerome H. Powell, Chair of the U.S. Federal Reserve, at the National Association for Business Economics Virtual Annual Meeting |
Good morning. It has been just eight months since the pandemic first gained a foothold on our shores, bringing with it the sharpest downturn on record, as well as the most forceful policy response in living memory. Although it is too early for definitive conclusions, today I will offer a current assessment of the response to the economic fallout of this historic event and discuss the path ahead.
The Pre-COVID Economy
As the coronavirus spread across the globe, the U.S. economy was in its 128th month of expansion—the longest in our recorded history—and was generally in a strong position. Moderate growth continued at a slightly above-trend pace. Labor market conditions were strong across a range of measures. The unemployment rate was running at 50-year lows. PCE (personal consumption expenditures) inflation was running just below our 2 percent target.
The economy did face longer-term challenges, as all economies do. Labor force participation among people in their prime working years had been trending down since the turn of the millennium, and productivity gains during the expansion were disappointing. Income and wealth disparities had been growing for several decades. As the expansion continued its long run, however, productivity started to pick up, the labor market strengthened, and the benefits of growth began to be more widely shared. In particular, improved labor market conditions during the past few years encouraged more prime-age workers to rejoin or remain in the labor force. Meanwhile, real wage gains for all workers picked up, especially for those in lower paying jobs.
Most economic forecasters expected the expansion and its benefits to continue, and with good reason. There was no economy-threatening asset bubble to pop and no unsustainable boom to bust. While nonfinancial business leverage appeared to be elevated, leverage in the household sector was moderate. The banking system was strong, with robust levels of capital and liquidity. The COVID-19 recession was unusual in that it was not triggered by a buildup of financial or economic imbalances. Instead, the pandemic shock was essentially a case of a natural disaster hitting a healthy economy.
Given the condition of the economy, in the early stages of the crisis it seemed plausible that, with a rapid, forceful, and sustained policy response, many sectors of the economy would be able to bounce back strongly once the virus was under control. That response would need to come from actions across all levels of government, from health and fiscal authorities, and from the Federal Reserve.
It also seemed likely that the sectors most affected by the pandemic—those relying on extensive in-person contact—would face a long and difficult path to recovery. These sectors and people working in them would likely need targeted and sustained policy support.
Some asked what the Fed could do to address what was essentially a medical emergency. We identified three ways that our tools could help limit the economic damage from the pandemic: providing stability and relief during the acute phase of the crisis when much of the economy was shut down; vigorously supporting the expansion when it came; and doing what we could to limit longer-run damage to the productive capacity of the economy.
The Recession and Nascent Recovery
When it became clear in late February that the disease was spreading worldwide, financial markets were roiled by a global flight to cash. By the end of the month, many important markets were faltering, raising the threat of a financial crisis that could exacerbate the economic fallout of the pandemic. Widespread economic shutdowns began in March, and in the United States, with many sectors shut down or operating well below capacity, real GDP fell 31 percent in the second quarter on an annualized basis. Employers slashed payrolls by 22 million, with those on temporary layoff rising by 17 million. Broader measures of labor market conditions, such as labor force participation and those working part time for economic reasons, showed further damage.
In response, we deployed the full range of tools at our disposal, cutting rates to their effective lower bound; conducting unprecedented quantities of asset purchases; and establishing a range of emergency lending facilities to restore market function and support the flow of credit to households, businesses, and state and local governments. We also implemented targeted and temporary measures to allow banks to better support their customers.
The fiscal response was truly extraordinary. The unanimous passage of the CARES Act and three other bills passed with broad support in March and April established wide-ranging programs that are expected to provide roughly $3 trillion in economic support overall—by far the largest and most innovative fiscal response to an economic crisis since the Great Depression.
What have these policies managed to accomplish so far?
First, the substantial fiscal aid has given vital support to households. The rise in transfers supported necessary spending and contributed to a sharp increase in household saving. Goods consumption is now above its pre-pandemic level. Services consumption remains low, although it seems likely that much of this weakness is the byproduct of health concerns and social distancing, rather than reductions in income and wealth. Consumption held up well through August after the expiration of expanded unemployment insurance benefits, indicating that savings from transfer payments continue to support economic activity. A recent Fed survey showed that households in July had surprisingly upbeat views of their current financial well-being, with 77 percent of adults either “doing okay” or “living comfortably,” an improvement even over the reading immediately preceding the pandemic.1 Still, since it appears that many will undergo extended periods of unemployment, there is likely to be a need for further support.
Second, aid to firms—in particular, the Paycheck Protection Program—and the general boost to aggregate demand have so far partly forestalled an expected wave of bankruptcies and lessened permanent layoffs. Business investment appears to be on a renewed upward trajectory and new business formation similarly appears to be rebounding, pointing to some confidence in the path ahead.
Third, after briefly seizing up in March, financial markets have largely returned to normal functioning, albeit in the context of extensive ongoing policy support. Financial conditions are highly accommodative, and credit is available on reasonable terms for many—though not all—households and businesses. Interest-sensitive spending has been relatively strong, as shown in the housing and auto sectors.
Taken together, fiscal and monetary policy actions have so far supported a strong but incomplete recovery in demand and have—for now—substantially muted the normal recessionary dynamics that occur in a downturn. In a typical recession, there is a downward spiral in which layoffs lead to still lower demand, and subsequent additional layoffs. This dynamic was disrupted by the infusion of funds to households and businesses. Prompt and forceful policy actions were also likely responsible for reducing risk aversion in financial markets and business decisions more broadly.
While the combined effects of fiscal and monetary policy have aided the solid recovery of the labor market so far, there is still a long way to go. Payrolls have now recovered roughly half of the 22 million decline. After rising to 14.7 percent in April, the unemployment rate is back to 7.9 percent, clearly a significant and rapid rebound. A broader measure that better captures current labor market conditions—by adjusting for mistaken characterizations of job status, and for the decline in labor force participation since February—is running around 11 percent.
The burdens of the downturn have not been evenly shared. The initial job losses fell most heavily on lower-wage workers in service industries facing the public—job categories in which minorities and women are overrepresented. In August, employment of those in the bottom quartile of the wage distribution was still 21 percent below its February level, while it was only 4 percent lower for other workers.2 Combined with the disproportionate effects of COVID on communities of color, and the overwhelming burden of childcare during quarantine and distance learning, which has fallen mostly on women, the pandemic is further widening divides in wealth and economic mobility.
The Road Ahead
I will now turn to the outlook. The recovery has progressed more quickly than generally expected. The most recent projections by FOMC (Federal Open Market Committee) participants at our September meeting show the recovery continuing at a solid pace. The median participant saw unemployment declining to 4 percent and inflation reaching 2 percent by the end of 2023. Of course, the economy may perform better or worse than expected. The outlook remains highly uncertain, in part because it depends on controlling the spread and effects of the virus. There is a risk that the rapid initial gains from reopening may transition to a longer than expected slog back to full recovery as some segments struggle with the pandemic’s continued fallout. The pace of economic improvement has moderated since the outsize gains of May and June, as is evident in employment, income, and spending data. The increase in permanent job loss, as well as recent layoffs, are also notable.
We should continue do what we can to manage downside risks to the outlook. One such risk is that COVID-19 cases might again rise to levels that more significantly limit economic activity, not to mention the tragic effects on lives and well-being. Managing this risk as the expansion continues will require following medical experts’ guidance, including using masks and social-distancing measures.
A second risk is that a prolonged slowing in the pace of improvement over time could trigger typical recessionary dynamics, as weakness feeds on weakness. A long period of unnecessarily slow progress could continue to exacerbate existing disparities in our economy. That would be tragic, especially in light of our country’s progress on these issues in the years leading up to the pandemic.
The expansion is still far from complete. At this early stage, I would argue that the risks of policy intervention are still asymmetric. Too little support would lead to a weak recovery, creating unnecessary hardship for households and businesses. Over time, household insolvencies and business bankruptcies would rise, harming the productive capacity of the economy, and holding back wage growth. By contrast, the risks of overdoing it seem, for now, to be smaller. Even if policy actions ultimately prove to be greater than needed, they will not go to waste. The recovery will be stronger and move faster if monetary policy and fiscal policy continue to work side by side to provide support to the economy until it is clearly out of the woods.
Given this audience, I would be remiss were I not to mention our review of our monetary policy strategy, tools, and communications, which concluded recently with our adoption of a flexible average inflation-targeting regime. My colleagues and I have discussed this new framework in detail in recent remarks. Today I will just note that the underlying structure of the economy changes over time, and that the FOMC’s framework for conducting monetary policy must keep pace. The recent changes to our consensus statement reflect our evolving understanding of several important developments. There has been a decline in estimates of the potential or longer-run growth rate of the economy and in the general level of interest rates, presenting challenges for the ability of monetary policy to respond to a downturn. On a more positive note, we have seen that the economy can sustain historically high levels of employment, bringing significant societal benefits and without causing a troubling rise in inflation. The new consensus statement acknowledges these developments and makes appropriate changes in our monetary policy framework to position the FOMC to best achieve its statutory goals.
The forward rate guidance adopted at our September meeting reflects our new consensus statement. The new guidance says that, with inflation running persistently below our longer-run 2 percent goal, the Committee will aim to achieve inflation moderately above 2 percent for some time so that inflation averages 2 percent over time and longer-term inflation expectations remain well anchored at 2 percent. The Committee expects to maintain an accommodative stance of policy until these outcomes are achieved. The Committee also left the target range for the federal funds rate unchanged at 0 to 1/4 percent, and it expects it will be appropriate to maintain this target range until labor market conditions have reached levels that are consistent with the Committee’s assessments of maximum employment and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time.
We expect that the new framework and guidance will support our efforts in pursuit of a strong economic recovery.
Thank you. I look forward to our discussion.
Compliments of the U.S. Federal Reserve.
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Greenhouse gas budget to ensure EU reaches Paris goal

Independent scientific body set up to monitor progress

All direct and indirect fossil fuel subsidies should be phased out by 2025 at the latest

All member states must become climate neutral by 2050, says Parliament in a vote on the EU climate law, calling for ambitious 2030 and 2040 emissions reduction targets.
On Wednesday, Parliament adopted its negotiating mandate on the EU climate law with 392 votes for, 161 against and 142 abstentions. The new law aims to transform political promises that the EU will become climate neutral by 2050 into a binding obligation and to give European citizens and businesses the legal certainty and predictability they need to plan for the transformation.
MEPs insist that both the EU and all member states individually must become climate-neutral by 2050 and that thereafter the EU shall achieve “negative emissions”. They also call for sufficient financing to achieve this.
The Commission must propose by 31 May 2023, through the ordinary decision-making procedure, a trajectory at EU level on how to reach carbon neutrality by 2050, say MEPs. It must take into account the total remaining EU greenhouse gas (GHG) emissions until 2050 to limit the increase in temperature in accordance with the Paris Agreement. The trajectory shall be reviewed after each stocktake at global level.
MEPs also want to set up an EU Climate Change Council (ECCC) as an independent scientific body to assess whether policy is consistent and to monitor progress.
A more ambitious 2030-target needed
The EU’s current emissions reductions target for 2030 is 40% compared to 1990. The Commission recently proposed to increase this target to “at least 55%” in the amended proposal for an EU climate law. MEPs today raised the bar even further, calling for a reduction of 60% in 2030, adding that national targets shall be increased in a cost-efficient and fair way.
They also want an interim target for 2040 to be proposed by the Commission following an impact assessment, to ensure the EU is on track to reach its 2050 target.
Finally, the EU and member states must also phase out all direct and indirect fossil fuel subsidies by 31 December 2025 at the latest, say MEPs, while they underline the need to continue efforts to combat energy poverty.
Quote
After the vote, Parliament rapporteur Jytte Guteland (S&D, Sweden) said: “The adoption of the report sends a clear message to the Commission and the Council, in light of the upcoming negotiations. We expect all member states to achieve climate neutrality by 2050 at the latest and we need strong interim targets in 2030 and 2040 for the EU to achieve this.
I’m also satisfied with the inclusion of a greenhouse gas budget, which sets out the total remaining quantity of emissions that can be emitted until 2050, without putting at risk the EU’s commitments under the Paris Agreement.”
Next steps
Parliament is now ready to start negotiations with member states once Council has agreed upon a common position.
Background
Following the European Council decision (2019) to endorse the 2050 climate-neutrality objective, the Commission in March 2020 proposed the EU climate law that would make it a legal requirement for the EU to become climate-neutral by 2050.
Parliament has played an important role in pushing for more ambitious EU climate legislation and declared a climate emergency on 28 November 2019.
Compliments of the European Parliament.
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Today, the European Commission announces that it will issue its forthcoming EU SURE bonds of up to €100 billion as social bonds. To that end, the Commission has adopted an independently evaluated Social Bond Framework. This Framework is meant to provide investors in these bonds with confidence that the funds mobilised will serve a truly social objective.
This announcement follows the Council’s approval to grant financial support to 16 Member States under the SURE instrument to help protect jobs and people in work.
President of the European Commission, Ursula von der Leyen, said: “We are not only investing billions of euros to save jobs in Europe and reduce the social impact of the coronavirus pandemic, but we are also doing it by issuing social bonds. This will give investors the chance to contribute to our efforts and up to €100 billion will help keep people in jobs in our Member States.”
Commissioner Johannes Hahn, in charge of Budget and Administration, said: “The decision to issue the EU SURE bonds as social bonds will be a game changer for the global social bonds market. At the same time, it is a clear demonstration of the EU’s long-term commitment to sustainable financing. I am very excited about today’s announcement and looking forward to the forthcoming EU SURE issuance in the very near future.”
The funds raised will be transferred to the beneficiary Member States in the form of loans to help them cover the costs directly related to the financing of national short-time work schemes and similar measures as a response to the pandemic.
Today’s Framework demonstrates to the investor community how the funds raised by SURE bond issuance will be used for a clearly identified objective: alleviating the social impact of the coronavirus pandemic and its consequences across the EU. Investors can therefore be confident that their investments in these bonds will be used to finance targeted social policy measures. At the same time, the Commission’s Social Bond Framework will contribute to the further development of the social bond market which is one pillar of the European ‘Sustainable Finance’ market.
In order to guarantee that the funds will be used for social purposes, the Social Bond Framework, underpinned by the SURE Regulation, requires Member States to report on how the borrowed funds have been spent. Under the Framework, Member States are also required to report on the social impact of the EU SURE bonds. Based on the information in these reports, the European Commission will be able to demonstrate to investors that the EU SURE bonds have been used to finance programmes with a positive social impact.
By preparing and presenting a Social Bond Framework, the Commission seeks to appeal to investors who want to put their funds to work for Environmental, Social and Corporate governance (ESG) purposes. The Commission’s Social Bond Framework has been established in full compliance with the Social Bond Principles (SBP) published by the International Capital Market Association (ICMA). It has been independently evaluated by an external evaluator, Sustainalytics.
Following today’s announcement, the Commission is moving one step closer towards the issuance of the first SURE bonds. The first transaction will follow in the second half of October.
Background
So far, 16 Member States will receive financial support under the SURE instrument to help protect jobs and keep people in work. Financial support will be provided in the form of loans granted on favourable terms from the EU to Member States. The Commission has today presented a proposal to the Council for a decision to grant €504 million in financial support to Hungary under the SURE instrument. Including Hungary, the Commission has now proposed a total of €87.8 billion in financial support under SURE to 17 Member States.
These loans will help Member States to cover the costs directly related to the financing of national short-time work schemes, and other similar measures they have put in place as a response to the pandemic, in particular for the self-employed. SURE could also finance some health-related measures, in particular at the work place, used to ensure a safe return to normal economic activity.
Member States can still submit formal requests for support under SURE, which has an overall firepower of up to €100 billion to help protect jobs and workers affected by the pandemic.
Compliments of the European Commission.
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The European Commission has today adopted a new 10-year plan, including a proposal for a Council Recommendation, to support Roma in the EU. There are seven key areas of focus: equality, inclusion, participation, education, employment, health, and housing. For each area, the Commission has put forward new targets and recommendations for Member States on how to achieve them, both of which will serve as important tools to monitor progress and ensure that the EU makes more headway in providing the vital support that so many Roma living in the EU still need.
Vice-President for Values and Transparency, Věra Jourová, said: “Simply put, over the last ten years we have not done enough to support the Roma population in the EU. This is inexcusable. Many continue to face discrimination and racism. We cannot accept it. Today we are relaunching our efforts to correct this situation, with clear targets and a renewed commitment to achieve real change over the next decade.”
Commissioner for Equality, Helena Dalli, said: “For the European Union to become a true Union of Equality we need to ensure that millions of Roma are treated equally, socially included and able to participle in social and political life without exception. With the targets that we have laid out in the Strategic Framework today, we expect to make real progress by 2030 towards a Europe in which Roma are celebrated as part of our Union’s diversity, take part in our societies and have all the opportunities to fully contribute to and benefit from political, social and economic life in the EU.”
While the aim is full equality, the Commission has proposed minimum targets for 2030, building on progress made under the previous framework. These include:

Cutting the proportion of Roma with experience of discrimination by at least half;
Doubling the proportion of Roma filing a report when experiencing discrimination;
Reducing the poverty gap between Roma and general population by at least half;
Cutting the gap in participation in early childhood education by at least half;
Cutting the proportion of Roma children who attend segregated primary schools by at least half in Member States with a significant Roma population;
Cutting the employment gap and the gender employment gap by at least half;
Cutting the gap in life expectancy by at least half;
Reducing the gap in housing deprivation by at least one third;
Ensuring that at least 95% of Roma have access to tap water.

To achieve these targets, it is crucial that Member States put in place the right policies. The Commission is providing guidance for Member States and has set out a list of measures to be taken by Member States in order to speed up progress towards Roma equality, inclusion and participation. The guidance and measures range from developing support systems for Roma victims of discrimination, to awareness raising campaigns in schools, supporting financial literacy, promoting the employment of Roma in public institutions, and improving access to quality medical check-ups, screening, and family planning for Roma women.
Next Steps
The Commission is calling on Member States to submit national strategies by September 2021 and report on their implementation every two years. The Commission will monitor progress towards the 2030 targets, drawing on input from surveys carried out by the European Fundamental Rights Agency and input from civil society. There will also be an in-depth mid-term evaluation of the new 10-year plan in its entirety.
Background
Although some improvements have been made in the EU – predominantly in the area of education – Europe still has a long way to go to achieve real equality for Roma. Marginalisation persists, and many Roma continue to face a combination of disproportionate discrimination, antigypsyism and socioeconomic exclusion in their daily lives.
The new EU Roma Strategic Framework is the first direct contribution to the implementation of the EU Action Plan against racism 2020-2025, and part of President von der Leyen‘s commitment to a Union of Equality.
The new EU Roma Strategic Framework for equality, inclusion and participation builds upon the EU Framework for National Roma Integration Strategies up to 2020. It ties in with the work of the Commission in other areas, including the recently adopted EU Action Plan against racism 2020-2025, the Victims’ Rights Strategy, and the Gender Equality Strategy.
Many of the policy areas linked to improving Roma equality, inclusion and participation are primarily national responsibilities. However, the EU has an important role in providing policy guidance, coordinating actions by Member States, monitoring implementation and progress, providing support via EU funds, and promoting the exchange of good practices between Member States.
Compliments of the European Commission.
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Today, the Commission adopted its Communication on EU enlargement policy and the 2020 Enlargement Package: The annual reports, assessing the implementation of fundamental reforms in the Western Balkans and Turkey, are presented together with clearer and more precise recommendations and guidance on the next steps for those partners, in line with the enhanced enlargement methodology.
EU High Representative for Foreign Affairs and Security Policy/Vice-President of the European Commission, Josep Borrell, said: “The citizens of the Western Balkans are part of Europe and they belong in the European Union. Today’s reports on the Enlargement Package provides a rigorous assessment that indicates the way forward, highlighting what has been achieved and where there is still hard work to be done.“
Presenting the annual Enlargement Package, EU Commissioner for Neighbourhood and Enlargement, Olivér Várhelyi, commented: “From the start of the mandate of this Commission, my aim has been to make sure both our partners in the Western Balkans and our Member States regain trust in the accession process. Our rigorous but fair assessments presented today detail where the countries stand with the reforms, with clearer guidance and recommendations on the future steps. Their dynamic implementation will speed up their progress on EU path and bring long-lasting results. In parallel, we have presented an Economic and Investment plan to spur their long term recovery and accelerate their economic convergence with the EU.”
Western Balkans
A credible enlargement policy is a geostrategic investment in peace, security and economic growth in the whole of Europe, more so in times of increasing global challenges and divisions. The firm and merit-based prospect of full EU membership for the Western Balkans is in the European Union’s very own political, security and economic interest. The Commission’s Communication “Enhancing the accession process – A credible EU perspective for the Western Balkans”, endorsed by Member States in March 2020, set out concrete proposals for strengthening the accession process, by making it more predictable, more credible, more dynamic and subject to stronger political steering. The strengthened approach underlines the importance of a merit-based accession process built on trust, mutual confidence and clear commitments by the European Union and the Western Balkans, with an even stronger focus on fundamental reforms.
Credible progress in the rule of law area remains a significant challenge, which often correlates with a lack of political will. A slow pace in judicial culture continues throughout the Western Balkans region without sufficient commitment to the principle of judicial independence. The overall pace in the fight against corruption has slowed down and the track record in most partners is far from meeting the requirements for membership, whilst in the area of freedom of expression and media pluralism there has been the least progress last year.
For the first time, the Commission assesses the overall balance in the accession negotiations with both Montenegro and Serbia and proposes the way ahead. This should allow the intergovernmental conferences, which should take place after the publication of the Commission’s annual package, to provide the fora for political dialogue on reforms, take stock of the overall accession process and set out the planning for the year ahead, including the opening and closing of chapters and possible corrective measures.
In the case of Albania and North Macedonia, the Commission looks forward to the first intergovernmental conferences to be convened as soon as possible after the adoption of the negotiating frameworks by the Council. The Commission confirmed further progress in the implementation of reforms in Albania and North Macedonia. Albania has already made decisive progress and is close to meeting the conditions set by the Council in view of the first intergovernmental conference.
Bosnia and Herzegovina is expected to address 14 key priorities from the Commission’s Opinion on its EU membership application, with only some steps taken so far.  As regards Kosovo, limited progress was made on EU related reforms and it is important that Kosovo authorities redouble their efforts to advance on the European path, including through the implementation of the Stabilisation and Association Agreement.
The Commission also adopted today a comprehensive Economic and Investment Plan for the Western Balkans, which aims to spur the long-term recovery of the region, a green and digital transition, foster economic regional cooperation, boost economic growth and support reforms required to move forward on the EU path.
Turkey
Turkey remains a key partner for the European Union. However, Turkey has continued to move further away from the European Union with serious backsliding in the areas of democracy, rule of law, fundamental rights and the independence of the judiciary. As stated by the Council in 2018 and 2019, Turkey’s accession negotiations have effectively come to a standstill and no further chapters can be considered for opening or closing. The report presented today confirms that the underlying facts leading to this assessment still hold, despite the government’s repeated commitment to the objective of EU accession. Dialogue and cooperation with Turkey have continued, in particular on addressing challenges related to migration, despite concerns over the events at the Greek-Turkish border in March 2020. The reports also outlines how Turkey’s foreign policy increasingly collided with the EU priorities under the Common Foreign and Security Policy.
Next steps
It is now for the Council to consider the recommendations of the Commission and take decisions on the steps ahead.
Background
Enlargement process
The current enlargement agenda covers the partners of the Western Balkans and Turkey. Accession negotiations have been opened with Montenegro (2012), Serbia (2014), and Turkey (2005). In March 2020, Member States agreed to open accession negotiations with North Macedonia and Albania. Bosnia and Herzegovina (application to join the EU submitted in February 2016) and Kosovo (Stabilisation and Association Agreement entered into force in April 2016) are potential candidates.
The EU accession process continues to be based on established criteria, fair and rigorous conditionality, and the principle of own merits. EU accession requires the implementation of complex reforms in a challenging environment; an objective which can only be achieved in the long term. For the process to move forward, accession candidates need, as a matter of priority, to deliver more swiftly genuine and sustainable results on key issues: the rule of law, justice reform, fight against corruption and organised crime, security, fundamental rights, functioning of democratic institutions and public administration reform, as well as on economic development and competitiveness.
Further progress on reconciliation, good neighbourly relations and regional cooperation are also of key importance.
Reporting in this year’s enlargement package also reflects the proposals of the enhanced approach to the accession process. The assessments and recommendations for the partners, especially the forward-looking guidance on specific reform priorities, are even clearer and more precise. The reports provide greater transparency, including on the state of play of the accession negotiations and the extent to which fundamental reforms are being implemented. Comparative overviews of performance on the fundamentals are provided, as well as external indices to complement the Commission’s assessments. Stronger contributions were solicited from Member States, who were consulted during the process and provided input and expertise, including through their Embassies on the ground. The reports also include assessments of the public political commitment of authorities to the strategic goal of EU accession.
Compliments of the European Commission.
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Statement | 2 October 2020 | By Executive Vice President Valdis Dombrovskis, Commissioner-Designate for Trade
Honourable Chairman, Esteemed Members of the European Parliament,
I was honoured when President von der Leyen placed her trust in me to continue to lead our shared European trade agenda. I hope that at the end of this hearing, you too will feel satisfied that you can place your trust in me. Honourable members, you already know me. I have worked with this house on many occasions. If approved, I will have a busy and challenging range of responsibilities, but we have a saying in Latvia: the ready back gets the load. As a former MEP, I understand that this committee has to be fully involved in our trade policymaking. I look forward to working closely together with you.] As Executive Vice-President of the Commission, my job is to build an economy that works for people. Trade is a powerful positive force in this respect. It supports 1 in 7 high-quality European jobs. Of course, in today’s world, trade is about much more than just trade. European trade policy must do more to help us meet the great challenges of our time. This is why we are conducting a wide review of our trade policy.
Working with you, honourable members, And with our stakeholders and civil society, I will bring forward a new roadmap for our trade policy. This roadmap must fit into our wider plan for a sustainable and digital recovery. It must be modern and up-to-date, in support of our values and wider geopolitical goals. It must maximise opportunities for our companies around the world. It must strengthen our toolbox to defend ourselves from unfair practices. It must leverage our strength as the world’s trading powerhouse. And it must unlock doors of influence globally. Only a Europe that is open to the world can shape the trade policy for the 21st century.
So, I propose to drive our trade policy forward, in order to:

reform the rules-based multilateral order;
rethink trade policy to deliver on our sustainability goals;
reinforce free and fair trade, by engaging with our partners while at the same time, strengthening our defence and enforcement; and finally,
redouble our leadership in trade by managing our key relationships.

Ladies and Gentlemen,
One of my first priorities will be to reform the rules-based system of global economic governance. We need to make it fit for today’s world. This means a WTO that settles disputes quickly and efficiently, with strong rules to ensure a level playing field. A WTO with the Sustainable Development Goals and climate change at the core of its work. And a WTO responding to the digital revolution, harnessing the full potential of the free flow of data.
In this respect, I will prioritise negotiations on E-commerce. Of course, it will be very important that we uphold our GDPR rules on personal data protection. Europe has the influence and credibility to lead this reform effort. In the context of the Covid-19 pandemic, we have already put forward ideas for a trade and health initiative that would facilitate trade in essential pharmaceutical and medical goods.
I am happy to announce today that I will launch a WTO Trade and Climate Initiative, focusing on green goods and services. I look forward to discussing this with you at the earliest opportunity. Staying with sustainability and climate – trade can deliver real results here.
I would direct you to my track record on sustainable finance – Europe was the first region with proper legislation in this area, and Europe is now a global leader. My approach was never top-down, but based on reaching out, finding common ground, and building alliances. My approach will stay the same. Working with our partners is how Europe achieves results.
Every time one of our trade deals includes a Trade and Sustainable Development chapter, we are making a mutual commitment. I know we need to strengthen the enforcement of these chapters even more. So, my commitment is that I will work closely with you and with our new Chief Trade Enforcement Officer to achieve results.
The Commission will propose the respect of the Paris climate commitments as an essential element in our future agreements. We will do more to support gender equality, women’s empowerment, and labour and human rights, including strong action to eliminate child labour. We will examine how we can include more granularity in the enforcement of these chapters. And I will work closely with Commissioner Reynders to advance the Commission’s proposal on mandatory due diligence already next year.
Ladies and gentlemen, one of the most urgent sustainability issues is to protect the Amazon rainforest. These are the lungs of our planet. Our best advantage is that we have an ongoing partnership discussion with the Mercosur countries. Negotiating this agreement has taken 20 years. It is the first of its kind that Mercosur has negotiated with a global partner.
The sustainability chapter is the most progressive in any of our trade deals. It contains explicit commitments on deforestation and implementation of the Paris agreement. However, I recognise the deep concerns expressed by the honourable members, by civil society, and by our citizens. I share these concerns. Therefore, we should redouble our engagement with our Mercosur partners, and find lasting solutions for the Amazon region. This will be a critical element on the path towards ratification of the agreement.
Honourable members, openness goes hand in hand with fairness. To reinforce our commitment to free and fair trade, we must engage with our partners. While at the same time, we must strengthen our defence and enforcement. Europe needs to become more assertive. By protecting our companies, securing our strategic interests, strengthening reciprocity and levelling the playing field.
The Chief Trade Enforcement Officer will work to implement our agreements. This means removing barriers and protecting our workers, consumers and companies whenever our trade partners do not play by the rules. In addition, I will seek to strengthen our enforcement tools. With your support, I hope we can swiftly agree on the updated enforcement regulation.
We must also sharpen our trade defence tools. I will support the efforts to launch a new legal instrument dealing with distortions from foreign subsidies in our internal market. I will work with Member States to ensure that screening mechanisms for Foreign Direct Investment are working well on the ground. I will also look for your help to conclude the work on dual-use exports and the International Procurement Instrument. And to strengthen our hand in defending the EU against the unfair practices of others, I will bring forward a proposal next year for a new anti-coercion mechanism.
In parallel with defending ourselves better, we need to help our companies, in particular our SMEs – to derive maximum benefit from our Free Trade Agreements. This is critical for our future economic prospects, given that in the next decade, 85% of global growth will take place outside the EU. Therefore, I am very pleased to announce that later this month I will launch the Access2Markets portal. This will be a one-stop-shop, in all EU languages, to help SMEs navigate the world of international trade. I look forward to your strong participation in this high-level event.
Ladies and gentlemen, All the goals I have outlined require our global partnerships to be strong and responsive. The Transatlantic trade and investment relationship remains the global engine of prosperity. I will spare no effort in revitalising our strategic partnership with the United States. I will bring a fresh impetus to transatlantic work on trade, technology, taxation, and reform of the multilateral trading system, including disciplines on industrial subsidies.  The recent deal on tariff reductions represents the first step of a renewed cooperation. However, if the U.S. continues to disengage from multilateralism and pursue unilateral actions, the EU will not hesitate to defend its interests and respond in a proportionate way.
Let me turn now from the United States to China. We need to pursue a results-oriented engagement with Beijing. I co-chair the High Level Economic Dialogue with China in my current role. This gives me a clear understanding of the political and economic reality. We will work to enhance our trade and investment relationship with China – notably by concluding the Comprehensive Agreement on Investment. However, our partnership must be restructured to be reciprocal, balanced and fair. European companies in China need fair treatment and real market access.
Closer to home, I see Africa as a key partner for Europe. Africa is on our doorstep. It is the continent with the highest growth potential in the world: by 2050, Africa will represent around 75% of the growth of the global workforce. I am committed to reinforcing our economic partnership agreements with Africa, building resilient value chains and boosting sustainable public and private investment in sectors of mutual interest.   Our long-term objective is to achieve a continent-to-continent agreement.
Moving still a little closer, we need to enhance our cooperation with our neighbourhood region. These relationships are an important aspect of our trade policy with a strong geopolitical dimension. Likewise, we must continue to support EU candidates and potential candidates, including through the extension of our autonomous trade measures. I count on the co-legislators to have the new regulation in place in time.And I very much welcome the recent vote in the INTA committee in this regard.
I would like to say a few words on our negotiations with the United Kingdom. It is in the strong interest of both sides to construct the closest possible trading relationship. But I should underline that progress will depend on both sides respecting their commitments under the Withdrawal Agreement. Both the Commission and the Parliament have been very clear on this point.
To conclude, honourable members, all the steps I have outlined will feed into the ongoing review of our trade policy. This will help us to design the new direction for EU trade, based on the concept of open strategic autonomy. If confirmed, I will come back to this house regularly to engage with you on all these issues. I will also maintain an active outreach to civil society. As proof of my commitment to a wide and inclusive approach, a series of dedicated civil society dialogues will start already next month. I pledge to maintain a high degree of transparency in my dealings with the European Parliament. I will ensure that you have all the information you need, in good time. I want to reassure the group coordinators that I have taken good note of the expectations you expressed in the context of my predecessor’s hearing last year. I hope you recognise that this has inspired the programme I have put before you today.
Let me conclude by saying that we live in unprecedented times. We face increasing challenges at home and abroad. Working together, we can design a strong European plan to address these challenges. Working together, we can future-proof Europe’s trade policy.
Thank you.
Compliments of the European Commission.
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