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At the Euro Group and ECOFIN Summits – the Issues of the EU Economic Recovery and Non-Performing Loans

Date

2021 01 18

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At video conference summits of the Euro Group (EG) and ECOFIN to be held on 18-19 January with participation of the Minister of Finance Gintarė Skaistė the main focus will be on the implementation of the Recovery and Resilience Facility and the issues of reduction of non-performing loans.

“At the Euro Group (EG) and ECOFIN summits the main focus will be on the implementation of the Recovery and Resilience Facility. We will share views with the ministers of finance concerning the most immediate investment priorities to be financed within the framework of this instrument and structural reforms, we will also touch on challenges faced in drafting national plans. The use of this instrument by promoting economic transformation towards sustainability, digitisation and creation of a high added value will contribute to the progress and better resilience to future shocks not only of Lithuania, but also of the entire euro area “, states Minister of Finance G. Skaistė.

At present Lithuania is working on the draft national plan in harmonisation with the new Government Programme. During next weeks it is planned to launch negotiations with the European Commission and discussions with socio-economic partners.

At the summit the discussions will also focus on the European Commission Initiative on Non-Performing Loans presented at the end of the last year. “It seems that the lessons of the last crisis have been learned, at least to some extent – I take a positive view of the preventive actions taken which, I believe, will help to avoid a leap in the level of non-performing loans at the EU level. This is vital in order to ensure that the banks could properly make lending to the economy during recovery period, and the financial system would remain stable despite the pandemic shock”, says Minister of Finance G. Skaistė.

Both at the EG and ECOFIN summits the main focus will be on the implementation of the Recovery and Resilience Facility. In order to make use of the financial assistance from the RRF, the Member States are currently working on the national recovery and resilience plans (RRPs) setting the agenda of government reforms and investments for 2021–2023. According to the RRF, EUR 2,225 billion grants are planned for Lithuania.

In drafting the national plan, Lithuania has excluded seven sets of components for which the RRF assistance is foreseen to be used: green transition; digital transformation; health; social issues; science and innovation; education; public finance. The first draft plan is scheduled in the middle of February and it is planned to further continue consultations with the European Commission (EC). The Member States should officially submit their plans to the EC by the end of April.

At the EG summit the ministers of finance will discuss imbalances between public and private sectors in the euro area within the COVID-19 crisis context, and with participation of Harvard University professor and ex-US Treasury Secretary Lawrence Summer in inclusive structure of the Euro Group, future perspective relations in the US monetary and financial policy areas will be discussed.

At the ECOFIN meeting the Presidency of Portugal will present its economic and financial agenda priorities, and in the context of the European Semester, the conclusions on the 2021 Alert Mechanism Report as well as recommendations for the 2021 euro area economic policy will be presented.