This European Parliamentary Week, is jointly organised by the European Parliament, the French National Assembly and the French Senate. MEPs and national parliamentarians from EU, candidate, and observer countries gather to discuss economic, budgetary, employment and social issues. Roberta METSOLA, EP President, opens the meeting in a recorded message from Luxembourg. Introduction by Dita CHARANZOVÁ (Renew,CZ), Eric WOERTH, Chair of the Finance Committee of the French Assembly, Claude RAYNAL, Chair of the Finance Committee of the French Senate and key-intervention by Ursula von der LEYEN, President of the European Commission (video message).

Brussels

meeting

CHARANZOVÁ, Dita (Renew, CZ)

economic governance (T)

METSOLA, Roberta (EPP, MT, EP President)

WOERTH, Eric (FR)

European Parliamentary Week (T)

VON DER LEYEN, Ursula (DE, EC)

president's agenda

Conference - Inter-parliamentary on Stability, Economic Coordination and Governance in the EU: opening statements

SOUNDBITE (English), Dita CHARANZOV&Aacute; (Renew, CZ), It is impossible to ignore that this year our European Parliament week is taking place during a very dark and devastating moment as a war is raging at the doorstep of the European Union as a result of the Russian invasion of Ukraine. And we, as Europeans, we stand firmly with Ukraine.

SOUNDBITE (English), Dita CHARANZOVÁ (Renew, CZ), I would also like to say a few words about the background and context of this meeting, which already has some tradition and which is called an Article 13 Conference. It is actually anchored in the so-called Fiscal Compact, more specifically in Article 13 in the territories of the governments of the Euro area of that intergovernmental treaty, which also foresees a parliamentary dimension of the European Semester.

SOUNDBITE (English), Dita CHARANZOVÁ (Renew, CZ), Concretely, representatives of the relevant committees of the European Parliament and of the national parliaments are to organise a conference in order to discuss budgetary and economic policies. The European Semester is all about sustainable growth and policy coordination. In addition, coordination requires dialogue and at European level, at a national level, a lot can go right and a lot can go wrong, as we all know.

SOUNDBITE (English), Dita CHARANZOVÁ (Renew, CZ), But it should not go wrong because of a lack of parliamentary involvement and inter-parliamentary debate. All of this to say that our discussions here are highly topical and relevant to the current post-pandemic situation. My French colleagues and I look forward to your contributions during this three plenary sessions today and tomorrow. And now, I would like to invite you to watch the welcoming address of the President of the European Parliament, Roberta Metsola, who unfortunately couldn't be here with us in person.

SOUNDBITE (English), Roberta METSOLA, President of the European Parliament, It is indeed my pleasure to open the 2022 edition of the European Parliamentary Week together with the chair of the Finance Committee of the French National Assembly, Eric Woerth, the chair of the Financial Committee of the French Senate, Claude Raynal, and the European Commission President Ursula von der Leyen.

SOUNDBITE (English), Roberta METSOLA, President of the European Parliament, I am joining you today from Luxembourg, one of the European Parliament's three places of work, in order to share my hopes and visions on the future of the European Union economic stability, coordination and governance.

SOUNDBITE (English), Roberta METSOLA, President of the European Parliament, In such a determinant moment for the future of Europe, inter-Parliamentary cooperation is more important than ever. Let me take this opportunity to thank our colleagues from the National Assembly and the Senate in France for having facilitated such an important conference. By exchanging our ideas, we will learn together and we'll try to find the best solutions for all citizens of the European Union, ensuring that nobody is left behind.

SOUNDBITE (English), Roberta METSOLA, President of the European Parliament, It is this unfortunate that year's discussions will once again be dominated by the impact of crises on our economies and our responses to them. Our EU economy is entering its third year of the COVID-19 pandemic and this is already the second virtual European Parliamentary Week. I am proud that we have made progress in the last years to move towards a more resilient Europe.

SOUNDBITE (English), Roberta METSOLA, President of the European Parliament, As a matter of fact, in 2021 we saw that Europe's economic recovery was strong and had reached pre-pandemic levels in many member states. This was only possible thanks to the bold, coordinated and united fiscal response by the European Union and its member states, a relationship which this inter-parliamentary dialogue has been nurturing for years. In order to continue to address the immediate challenges we are facing, the so-called "general escape clause" of the Stability and Growth Pact will continue to apply in 2022.

SOUNDBITE (English), Roberta METSOLA, President of the European Parliament, Moving forward, our new growth path, which will see the acceleration of Europe's digital and green transitions, will be based on three pillars. Firstly, the new own resources proposal, which this house had insisted on back in 2020. This will concretely contribute towards financing the twin transitions.

SOUNDBITE (English), Roberta METSOLA, President of the European Parliament, Secondly, based on the Recovery and Resilience Facility, the centrepiece of the EU's largest ever stimulus package, Next Generation EU, reforms and investments will continue to generate more impetus for our economies. Access to this funding will be determined by Member States' National Recovery and Resilience Plans, which have been well underway since the last European Parliamentary Week last year.

SOUNDBITE (English), Roberta METSOLA, President of the European Parliament, And thirdly, the upcoming reform of the Stability and Growth Pact. Our aim is to maintain fiscal prudence, while at the same time ensuring that member states have the ability to finance the twin transitions and stabilise investment levels. Our targets are ambitious, but they're also real, necessary and achievable if we tackle them together.

SOUNDBITE (English), Roberta METSOLA, President of the European Parliament, With that being said, a few weeks ago, we thought that the pandemic was the worst thing that could happen to us. But with Putin's illegal military invasion of Ukraine, the longstanding peace in Europe has been shattered. Europe is now facing additional challenges to economic coordination in light of a changed geopolitical context.

SOUNDBITE (English), Roberta METSOLA, President of the European Parliament, We can all be proud of the EU's swift response to Russian aggression by adopting an unprecedented package of EU sanctions against Putin and his allies. Yet, just when we thought that we had overcome the worst of the COVID-19 pandemic, we are seeing a spike in inflation, high energy prices and increased food prices. It is too early to determine the exact impact of our sanctions on Russia as the situation is still evolving. But one thing is for sure: they must hurt Putin and we must be ready for them to hurt us too. It is a cost that we must bear at the turning point in European history, a price I think our people are willing to pay.

SOUNDBITE (English), Roberta METSOLA, President of the European Parliament, One thing we have certainly learnt from Putin's aggression is that our economic response must truly become part and parcel of our discussions on Europe's strategic autonomy. Our new growth path cannot include energy dependencies on the Kremlin, and that is why the green transition is essential. The Green Deal is as much about security and job opportunities as it is about climate considerations.

SOUNDBITE (English), Roberta METSOLA, President of the European Parliament, Our sights must be set on helping our companies look elsewhere than Russia for growth opportunities. The Union budget remains our key instrument to strengthen solidarity and cohesion. We need to make it work for our security and defence policy wherever it adds value. And for this to be truly effective, the ambition at European level must be matched by ambition at national level. And so, it is essential that we maintain our united response and our strong coordination also between the member states economic and fiscal policies. It is only in this way that we will be able to adapt and react swiftly to these combined realities, which have shaped and will continue to shape our EU economy.

SOUNDBITE (English), Roberta METSOLA, President of the European Parliament, The exchanges that we will be having today and tomorrow will be decisive for the future of the European Union's economic stability, coordination and governance. They will be decisive for the current and for future generations. I therefore wish you many fruitful discussions, and I look forward to hearing the perspectives from all speakers and colleagues from across all the national parliaments and from this house.

SOUNDBITE (French), Eric WOERTH, Chair of the Finance Committee of the French Assembly, We're meeting in a disastrous and unbelievable situation, which is the invasion of Ukraine by Russia. I welcome the decisions taken both at the member state level, as well as at the European level. We are meeting today and tomorrow to host the Inter-parliamentary Conference on Stability, Economic Coordination and Governance in the European Union.

SOUNDBITE (French), Eric WOERTH, Chair of the Finance Committee of the French Assembly, As happens every year, it's co-organised this year by the European Parliament, as well as the French National Assembly and Senate. On behalf of Richard Ferrand from the French Senate, I'd like to welcome each and every one of you. Thank you for participating in this inter-parliamentary event, which is held under the umbrella of the French Presidency of the European Council.

SOUNDBITE (French), Eric WOERTH, Chair of the Finance Committee of the French Assembly, We aim to look at current events in economics and policies that we have been doing for the past two years, we've been living through complicated times and just like we did during the previous conference, we would like to include a debate covering several topics, all of which are particularly important, as we have heard from the president of the European Parliament.

SOUNDBITE (French), Eric WOERTH, Chair of the Finance Committee of the French Assembly, First, we'll speak about the own resources of the EU. The discussion to have greater own resources and enlarge them is being addressed within the European Commission and as things take shape, I think it's important to have a debate within the Inter-parliamentary Conference to look at both the national and EU aspects of these own resources. These are tax related choices which commit us all and a good coordination between EU and national taxation is necessary for all of our member states.

SOUNDBITE (French), Eric WOERTH, Chair of the Finance Committee of the French Assembly, We'll also be reviewing the Stability and Growth pact, the suspension of deficit rules has been happening now for two years and we are questioning how this will continue. It's difficult to foresee that in January of 2023 we will be able to simply go back to the way things were before and follow the rules that have been set up in 1997, so we need to discuss this.

SOUNDBITE (French), Eric WOERTH, Chair of the Finance Committee of the French Assembly, We have to face a difficult choice which will condition the way in which our national budgetary policies will be carried out in the coming years. France is therefore concerned by this debate. The difficulties, which no one can ignore, is that we have a very tight room for manoeuvre, but we do have some. We've already reformed the criteria several times. For example, in 2005, preventing a procedure for excessive deficit, which was the case for our country, and again in 2011 to install the European Semester and to have further rules, both in prevention and correction of the pact.

SOUNDBITE (French), Eric WOERTH, Chair of the Finance Committee of the French Assembly, Now, I'd just like to point out that the strength of the eurozone and the member states that make it up depend on all of the rules that we follow and our ability to carry out the necessary investment to organise these transitions, including the energy transition. We've seen each member state set up their own programme under the auspices of the European Semester, and this gives greater responsibility to our national governments and it shows us how each national budget is necessary to build our common goals in the medium term.

SOUNDBITE (French), Eric WOERTH, Chair of the Finance Committee of the French Assembly, Tomorrow we will be discussing our recovery and resilience and what we will do with this exceptional budget and how they are related to national recovery plans. The Union has a very strong budget and we welcome it. We do look at the leverage effect that this new facility will create. This will, at the same time, lead to a greater budgetary integration, as well as fiscal integration, and from that point of view, I'd like to say that facing the adversities of the past few years, the EU has faced them together and we have come out stronger.

SOUNDBITE (French), Eric WOERTH, Chair of the Finance Committee of the French Assembly, When it comes to this facility, we need to discuss it in greater detail. The Recovery and Resilience Facility includes the choices of national investments and we need, of course, to respect it. We're going through a very difficult moment, I don't need to describe it. You all know it very well. So should we build a new facility and in what way? What are the views of the national members of Parliament and as well as members of the European Parliament? Hearing what they have to say will help us, as we will know what has been happening, how they are facing the situation, each and every member state.

SOUNDBITE (French), Claude RAYNAL, Chair of the Finance Committee of the French Senate, The issue of own resources is very important, as is the revision of the Growth and Stability Pact. Tomorrow, we'll be looking at the implementation of the Recovery and Resilience Facility, which is the EU recovery plan, and all of these discussions are important, all the more so because the EU finds itself in a crucial stage of its history. After two years of fighting the COVID-19 pandemic and finding a way of making our economy economies more resilient and having more solidarity, we now need to look to the future and try and take into account the challenges such as innovation and the fight against climate change.

SOUNDBITE (French), Claude RAYNAL, Chair of the Finance Committee of the French Senate, In particular, the war in Ukraine, of course, has upset all of that and will now give us immediate and very large challenges to deal with. I'm sure this will be at the heart of our discussions, in particular when we look at how to implement a stability pact and how we set the priorities for the European budget. There is a new economic shock that the EU needs to deal with, and that's why the European Recovery Plan of 750 billion euro needs to be implemented in an efficient way, so that our national economies can be supported. We will be touching upon all of those issues in our discussions.

SOUNDBITE (French), Claude RAYNAL, Chair of the Finance Committee of the French Senate, Then there's a new EU instrument for European recovery, and that has also pointed to the need to discuss our own resources at a European level. If this recovery plan is to be financed, then from 2026 it will have to be financed through national budgets in the absolute absence of any resources. But of course, we know that there are options on the table and we also know the problems linked to all of the options. And we have Mr. Koopman, the director general, and also Mr. Lamassoure with us to talk about these issues. And we'll also be looking at the Growth and Stability Pact and we'll hear from Commissioner Gentiloni on this.

SOUNDBITE (French), Claude RAYNAL, Chair of the Finance Committee of the French Senate, We had a hearing a couple of months ago in the French Senate, and the reform of the Stability and Growth Pact is very topical because of the challenges that are thrown out by the crisis in Ukraine. The cost to the EU and its member states of the conflict in Ukraine could be 1.25 of the GDP. Now it's probably too early to have a full overview, but there will be consequences of the war in Ukraine on inflation rates, interest rates. Also, when it comes to the security of supply of energy and food, we'll have to host refugees and there will also be an increase in defence spending.

SOUNDBITE (French), Claude RAYNAL, Chair of the Finance Committee of the French Senate, Now all of those elements are new elements which will have to be taken into account when we look at public finances. It is certainly my hope that during our discussions, we can look at all of these issues, which are important to European citizens, but are also of importance to all of our respective national parliaments.

SOUNDBITE (English), Ursula VON DER LEYEN, President of the EC, Millions of Ukrainians are seeking shelter in the European Union, torn from their families and country by Putin's bombs. The scenes of war are devastating, but the images of European citizens welcoming refugees show another picture and they tell the story of hope. They show a pan-European wave of solidarity for our Ukrainian friends because they are part of our European family.

SOUNDBITE (English), Ursula VON DER LEYEN, President of the EC, The European Union has dedicated 500 million euros in humanitarian assistance, and more will come. We will mobilise billions of euros from unused funds in the budget. We will mobilise it to help member states act quickly and humanely to rebuild reception centres, mobile hospitals and schools for children and provide employment support for adults or child care facilities. I applaud the enormous generosity of all of Europeans and all member states, especially those boarding Ukraine.

SOUNDBITE (English), Ursula VON DER LEYEN, President of the EC, The European Union stands united with Ukraine, but you all know this is not just a humanitarian crisis. This goes much deeper. Russia's war of aggression constitutes a tectonic shift in European history. The Kremlin has directly attacked our values and the international order. This is a crisis of European security and sovereignty. And together, we need to rise to this authoritarian threat to protect European citizens and defend not just our democracies, but democracy itself.

SOUNDBITE (English), Ursula VON DER LEYEN, President of the EC, Last week in Versailles, with President Macron and the European heads of state and governments, we discussed three strategic areas. First, the need for Europe to boost its security and defence capabilities. Second, the need for Europe to double down on the green transition to bolster our energy security against foreign manipulation. And third, the need for investment and support for European citizens in a turbulent global economy.

SOUNDBITE (English), Ursula VON DER LEYEN, President of the EC, This conference is ultimately about economic governance, but we cannot separate that conversation from global events and the EU strategic priorities in the last two years. We have made significant steps in stepping up Europe's defence cooperation, but the magnitude of the events we are facing represents a watershed moment for Europe.

SOUNDBITE (English), Ursula VON DER LEYEN, President of the EC, As General Burkhard, the French Chief of Staff of the French Army explained a few days ago: "For 20 years, we have dealt mostly with counter-terrorism operations. We are now seeing a conflict on a truly different scale", and he's so right. The military threat to Europe has fundamentally changed. All member states will have to review their national force structure and posture, and it is already clear that we are collectively facing a massive investment gap.

SOUNDBITE (English), Ursula VON DER LEYEN, President of the EC, Defending Europe from Russian military aggression requires a different level of cooperation, from innovation and development to procurement and operational use. First, we need to collectively identify the capabilities that are required to defend Europe in this new strategic reality. Second, at a deeper level, we have to have another conversation about the type of defence industrial base we need in Europe as a result of the Russian aggression. The European Defence Fund can help to incentivise spending on common defence projects and to strengthen the defence industrial base in Europe, but it needs to be strengthened itself.

SOUNDBITE (English), Ursula VON DER LEYEN, President of the EC, And thirdly, it is important to identify and close the most pressing capability and investment gaps in this sector. Systems like air and missile defence or enhanced cybersecurity and defence, all those require a different level of cooperation. Thus, I will present by May an analysis of our defence investment needs gaps and opportunities both at national and at European level. It will be crucial that our resources are invested strategically on joint European projects that ensure interoperability in the field and enable our defence industry to scale up across national borders. We need to spend not only more, but more together. It is time for our European Defence Union to enter the stage.

SOUNDBITE (English), Ursula VON DER LEYEN, President of the EC, Honourable members, this brings me to my second point beyond military means. Europe will only be secure if we end our overreliance on Russian gas. We simply cannot rely anymore on a supplier that uses energy to put pressure on us. We have to diversify our supply away from Russia and to reliable suppliers, and we have to massively invest in renewable energy. And the good news is we have everything in place to act with the European Green Deal.

SOUNDBITE (English), Ursula VON DER LEYEN, President of the EC, The European Union is the world leader in the green transformation. The direction of travel is set and now we will accelerate. The green transition is a strategic investment in our independence and in our security. And this is why last week the European Commission unveiled Repower EU. We will reduce EU demand for Russian gas, first by fast tracking new renewable energy projects, including hydrogen and biogas. Second by speading up investment and energy efficiency to roll out, for example, solar panels, wind and heat pumps. Those are low hanging fruit, as is the insulation of buildings. And third, we are diversifying our gas supplies. The United States, Norway, Azerbaijan and others are stepping up delivery.

SOUNDBITE (English), Ursula VON DER LEYEN, President of the EC, Finally, the investment in LNG infrastructure pays off because we can use it increasingly for hydrogen. Thus, we can end our overreliance on Russian gas well before 2030. We just discussed this intensively at leaders level in Versailles. It is doable and we will go for it. We also discussed in Versailles last week how to meet the momentous responsibilities we face and the high levels of investments over time, while maintaining fiscal sustainability.

SOUNDBITE (English), Ursula VON DER LEYEN, President of the EC, Investments must be strategic to strengthen our capacities in defence, cyber security, energy, critical supply chains, semiconductors, health and food security, and we need to mobilise the private sector. National parliaments should play a central role in this conversation. You are the elected representatives of European citizens. Your scrutiny and your commitment are central to turn European investment into local growth and to shape the reforms each of your countries need. Your voice will be essential in the debate on our future economic governance. We need an open debate and our aim is to achieve a consensus by the end of the year.

SOUNDBITE (English), Ursula VON DER LEYEN, President of the EC, Honourable members, the events of these weeks are an unprecedented test for our union. We have acted with speed and resolve and we will continue to rise to the challenge we are facing. Together. Because unity is our best strength. The coming weeks and months will be difficult, but together we can help our Ukrainian friends in the toughest of times. Together, we can make this war unsustainable for the Kremlin and give diplomacy a chance. This is what our union stands for. So long live democracy, long live Ukraine and long live Europe.