European Semester Conference. Inter-parliamentary Conference on Stability, Economic Coordination and Governance in the EU in the European Parliament in Brussels. Opening of the Conference on Investing in our climate, social and economic resilience, What are the main policy priorities? Welcoming remarks by David SASSOLI, EP President and Eduardo FERRO RODRIGUES, President of the Portuguese Assembleia da República. Key note speeches from an international perspective by António GUTERRES, Secretary General of United Nations and Kristalina GEORGIEVA, Managing Director of the International Monetary Fund. Key note speeches from a European perspective by Charles MICHEL, President of the European Council, Ursula von der LEYEN President of the European Commission and Christine LAGARDE, President of the European Central Bank. This transcription speech is the result of an automatic process. Check against delivery.

Brussels

own resources (T)

MICHEL, Charles (BE)

GUTERRES, António (PT)

SASSOLI, David Maria (S&D, IT, S&D, IT)

interparliamentary conference

European Semester (T)

GEORGIEVA, Kristalina (BG)

FERRO RODRIGUES, Eduardo (PT)

LAGARDE, Christine (FR)

European Parliamentary Week (T)

Multiannual financial framework 2021-2027 (T)

VON DER LEYEN, Ursula (DE, EC)

Recovery plan for Europe (T)

recovery and resilience facility (T)

European Semester Conference - Inter-parliamentary Conference on Stability, Economic Coordination and Governance in the EU: Opening statements and Key note speeches

SOUNDBITE (Original), David SASSOLI, EP President, Good morning, ladies and gentlemen, good afternoon. Good afternoon to all colleagues. Representatives of the national parliaments present members of the European Parliament. I am very glad to be able to speak to you today, along with President Rodriguez of the Assembly of the Republic, and along with the main speakers which have accepted to participate in this session, this plenary session, opening session of the new edition of the European Parliament Week.

SOUNDBITE (Original), David SASSOLI, EP President, We share the hope and vision on a number of different topics and more specifically, what we want to focus on today, the circumstances of the organisation of this event are particular today. Today, the world confronts the virus. The values of the continent are being tested and all of those different structures that existed for international cooperation after the Second World War to promote liberty, prosperity and peace are being tested. So we do have a challenge before us, and it creates a very, very special situation, a need for international cooperation of unprecedented proportions following the Second World War.

SOUNDBITE (Original), David SASSOLI, EP President, Together, we have to confront the problems, the transnational problems, that cannot be confronted alone. Today more than ever we need multilateralism. We need Europe. We need international cooperation. And the political progress, the institutional progress that has existed is, of course, under threat and has been under threat by populist governments on both sides of the Atlantic. Nonetheless, we move forward and we have to look at the causes of this pandemic as well.

SOUNDBITE (Original), David SASSOLI, EP President, It is the direct result of economic model which called for exploitation of a rampant and maximalist nature, unbridled as well, which led to massive deforestation, intensive agriculture, urbanisation, pollution, impoverisation of diversity. And of course, the entire world has suffered terribly from this pandemic. In other words, beyond the economic consequences and social consequences, the pandemic has also led to an exacerbation of inequality and thus threatens the cohesion of our European society. Entire sectors of the economy have been decimated.

SOUNDBITE (Original), David SASSOLI, EP President, Many, many businesses closed forever. The pandemic has struck down the vulnerable individuals in society, the elderly, isolated individuals, children, women, the disabled and has increased inequality. Inequality was always already a serious issue. Prior to the pandemic. So many, many member states have been severely hit, particularly young people and women. It has increased inequality at the national level, but at the international level as well. We're not all equal. Not all are equal. As far as how the pandemic is dealt with either. We have an economic emergency. We have a social challenge before us.

SOUNDBITE (Original), David SASSOLI, EP President, The agreement of the Council of the 21st of July was historic in nature for the first time in the history of the European Union. We have massive transfers financed by the Union directly to the member states. These financial flows provide for and are essentially in themselves a concrete mechanism of solidarity and indicate the concerted effort. So these resources have to indeed support our economies, particularly the economies that have been struck down in a number of member states. And this is an emergency situation.

SOUNDBITE (Original), David SASSOLI, EP President, As soon as possible we have to establish a particular cut off point as far as our own resources and establish how we're going to move forward for the new generation EU. And it is only after ratification that we'll be able to move forward and will the markets be rejuvenated, so to say, or will have an injection of those necessary resources that they need. Within the framework of this agreement, there are clear responses to the challenges that have been set before us by the pandemic.

SOUNDBITE (Original), David SASSOLI, EP President, It's necessary to, however, look at particular facets, for example, protection of the environment and indeed protection of the environment becomes all the clear now with the pandemic, but not only protection of the environment. Protecting cohesion in our Europe as well, the Next Generation EU will provide for the necessary investments and will transform our productive process into a structure into, if you like, a tank that will help us to defend ourselves against the various challenges that exist before us.

SOUNDBITE (Original), David SASSOLI, EP President, Environmental challenges, climatic challenges, social challenges, the inequality that existed before us, and dealing with poverty, human poverty, impoverishment of the environment as well, and the ecological crisis that exists right now. And that will have to confront in the future as well. We are unfortunately not all equal. We have to achieve, however, equality and it is in this context that I feel that it's necessary to use these particular instruments which have been activated and ignited, if you like, by the European Union to fight covid-19 to fight poverty as well.

SOUNDBITE (Original), David SASSOLI, EP President, Reflecting the need to keep the necessary clauses, the safeguard clauses, in place as well so that all can be used in the most effective fashion. In other words, in the months to come, we have very important decisions to be made as far as how we're to move forward. Otherwise, 25 member states will have to initiate procedures because of excessive deficit. That is to say, if we don't use these new tools, financial tools that exist before us and move forward effectively.

SOUNDBITE (Original), David SASSOLI, EP President, So I think indeed we do have to speak very much about these particular issues, about the initiative, which has already been ignited by the European Union to fight the covid-19 pandemic and its consequences, and we have to understand that it is only through a concerted effort that will be able to be effective. Part of that concerted effort is the vaccination campaign. For months, we've been trying to find an effective vaccine that now exists before us.

SOUNDBITE (Original), David SASSOLI, EP President, Numerous challenges have existed and now we move forward with it. Now, in a few months, we will celebrate five years since the Paris agreement. The Paris Agreement for the protection of the environment. Five years. That means that we have to take stock of what has been done, what the possibilities are for the future, what sort of facilities have been adopted and what sort of policies have been taken on board by the European Union in order to reach those particular goals set in the Paris agreements and particularly on the sustainable development front.

SOUNDBITE (Original), David SASSOLI, EP President, So I think it's very important to look at these resources, the recuperation of resources, the issue of own resources as well, and how all of this will come together in order to serve generations of the future. What is most important that we work jointly, particularly as far as adoption of measures in order to come back to where we were, recuperate all the time and all that which has been lost. And I do feel that, once again, it is only collectively that would be able to achieve that.

SOUNDBITE (Original), David SASSOLI, EP President, We need to. We need that energy. We need that vitality in order to confront the challenges that exist before us. It's not only to protect individuals, it's to protect our society as a whole. And at this point, I would like to give the floor to president Eduardo Ferro Rodrigues, you have the floor. President of the Assembly of the Republic.

SOUNDBITE (Original), Eduardo FERRO RODRIGUES, President of the Portuguese Assembleia da República, It's a real pleasure to be together with you today, even if it's in the virtual format. I hope that we won't lack opportunities in the future to be able to meet each other in Lisbon. The times we're living through a hard, the dark days of the first wave of the pandemic has now been followed by a second wave that was even more deadly, even more devastating than the first. And overcoming it is our priority. Everything is fragile. Everything is contingent. We have to look at the macroeconomic indicators and the forecasts that have been made.

SOUNDBITE (Original), Eduardo FERRO RODRIGUES, President of the Portuguese Assembleia da República, The economic impact of coronavirus is a crosscutting horizontal attack on our economy. It's paralysed aviation and tourism, companies are facing serious difficulties, particularly small and medium sized companies. Workers are being laid off and find themselves unemployed. There are limitations on the four freedoms of the European Union. Facing an unheard of situation, the EU has resolved to react. In April, we saw the initial measures being taken and then in the summer, with the proposals for the MFF and the proposals for the Next Generation EU.

SOUNDBITE (Original), Eduardo FERRO RODRIGUES, President of the Portuguese Assembleia da República, Now these measures will be decisive in our ability to respond to recover and reform our economies. However, political agreements are not sufficient in themselves. We're still awaiting the ratification of the Council's own resources decision by many national parliaments. Without that, we don't have access to the financial markets. In Portugal, ratification took place at the end of January. This is a moment for us to think, but also a time to act. We have to look at the conditions of macroeconomic conditionality within the Stability and Growth Pact.

SOUNDBITE (Original), Eduardo FERRO RODRIGUES, President of the Portuguese Assembleia da República, We're closely following the debate on the pertinence of the measures. There was a temporary derogation through the general escape clause in March 2020, but as president of the Portuguese Assembly of the Republic and as someone who is very aware of the effects of these criteria, I would call upon everyone to take this opportunity to review the logic, the structural logic of those conditionality criteria. I think that there's a broad consensus that we should avoid procyclical policies.

SOUNDBITE (Original), Eduardo FERRO RODRIGUES, President of the Portuguese Assembleia da República, The World Bank and the European Central Bank have stated this clearly, but there also has to be consensus behind the the review of these criteria, which have shown procyclical characteristics in the past with extremely devastating social impact across many different European countries. We have to continue to work on finalising banking union and capital market union.

SOUNDBITE (Original), Eduardo FERRO RODRIGUES, President of the Portuguese Assembleia da República, On the political level, Europe is losing its central position. We've got demographic challenges. Youth unemployment is worrying. The education system needs to ensure that young people can get a place on the employment market. For that, research and innovation are essential. We have changed our relationship with the planet completely. We're becoming increasingly aware of the need to combat climate change, and we're becoming more and more aware of how important territorial planning is.

SOUNDBITE (Original), Eduardo FERRO RODRIGUES, President of the Portuguese Assembleia da República, Words like the circular economy, the carbon economy, the green and digital transition are all things that have entered our vocabulary. Of course, these all have to be just we also need to ensure that there is an ethical framework and that the human being is at the centre of our concerns. The pandemic has exposed other realities, it's a exposed our dependence on raw materials. Now the green deal is going to be a major initiative.

SOUNDBITE (Original), Eduardo FERRO RODRIGUES, President of the Portuguese Assembleia da República, I see relocalization as a major opportunity. To be successful in this effort, we have to approach the economic fabric of our societies as a whole. It's the capillary network of small and medium sized companies that provide our added value. They're part of industrial ecosystems, giving more power to these small and medium sized companies will give us extra benefit. There's something that is obvious, but it's worth reaffirming. Industrial policy has to be open. It has to be sustainable and inclusive. And that is the basis of the just transition mechanism.

SOUNDBITE (Original), Eduardo FERRO RODRIGUES, President of the Portuguese Assembleia da República, Sustainable development has three pillars: economics, the environment, but also social aspects. Over the decades, inequality has increased and the concern is that the pandemic will further worsen situations of social exclusion. Turning this direction of travel around is a priority, not just a social necessity, but a democratic demand. Populism and authoritarianism can only live when there is a lack of perspective. The social summit in the Porto should provide qualitative and quantitative conclusions so that we can conclude the European pillar of social rights.

SOUNDBITE (Original), Eduardo FERRO RODRIGUES, President of the Portuguese Assembleia da República, Colleagues. We hold this meeting in demanding times. And my hope is that we will be able to guide the actions of the European Union through those conclusions on the social pillar. It's our society that is the foundation for our common future. We'll now give the floor to the secretary general of the United Nations, Antonio Guterres.

SOUNDBITE (Original), António GUTERRES, Secretary General of United Nations, Honourable members of parliament, the partnership between the United Nations and the European Union is strongly rooted in shared values and priorities. This year's European Parliament week comes as the world continues to face the devastating impacts of the covid-19 pandemic. What started as a global health crisis has triggered economic, social, humanitarian and human rights crises. It has greatly exacerbated inequalities within and amongst nations.

SOUNDBITE (Original), António GUTERRES, Secretary General of United Nations, And while the world is facing an existential climate threat, biodiversity loss and pollution, we will not overcome the situation by reverting to the old normal. We have an opportunity to be ambitious. We have an obligation to recover better. We must embrace a sustainable and inclusive best way, invest in health systems and social protection, build resilient infrastructure, support education, green jobs and of course, reduce that pressure. No country should be forced to choose between helping their populations and servicing their debts.

SOUNDBITE (Original), António GUTERRES, Secretary General of United Nations, In these efforts, we have a framework to guide us: the sustainable development goals. The European Union's Recovery and Resilience Facility holds great potential, representing the largest stimulus package in the EU's history. Putting the European green deal at the heart of this effort is not only the right thing to do, but the smart investment in the future. Support for a global rollout of covid-19 vaccinations is also a crucial part of the solution. Let's be clear. It is unacceptable that just 10 countries account for 75 percent of global vaccinations to date.

SOUNDBITE (Original), António GUTERRES, Secretary General of United Nations, It's not only unfair, it is also dangerous. I'm calling for a global vaccination plan to bring together all those with the required power, scientific expertise and production and financial capacities and ensure that everyone has access to the vaccine. Only then can we defeat covid-19 and rebuild more resilient economies and societies. 2021 must also be the year to build a global coalition for reaching carbon neutrality by the middle of the century.

SOUNDBITE (Original), António GUTERRES, Secretary General of United Nations, At the same time, we must achieve a breakthrough on adaptation. Donors should commit to increasing the share of climate finance allocated to adaptation from 20 percent today to 50 percent in 2024. Developed countries must also fulfil their pledge to mobilise 100 billion US dollars annually for climate action in developing countries. All development banks should align their portfolios with the Paris Agreement and the Sustainable Development Goals by 2024 and mobilise private finance.

feutréeSOUNDBITE (Original), António GUTERRES, Secretary General of United Nations, I thank the European Union's continued engagement towards these. Meanwhile, geopolitical tensions are on the rise, including in Europe. We must strengthen diplomacy with peace, build trust between institutions and society, and combat discrimination and misinformation. We must adapt to complex situations through a networked, inclusive and effective multilateralism. As a former member, I know firsthand that parliaments have a key role to play, and EU leadership will be vital.

SOUNDBITE (Original), António GUTERRES, Secretary General of United Nations, Only by working together with the most vulnerable at the centre of our efforts can we truly build a more sustainable, just and resilient future. I will continue to count on your vision and your support. Thank you.

SOUNDBITE (Original), Kristalina GEORGIEVA, Managing Director of the International Monetary Fund, Thank you very much for the opportunity to address you today. As EU commissioner, in the past, I benefited greatly from interactions with this conference, and I am honoured to join you again. It is a critical time. Jean Monet once said: people only act in a state of necessity and usually only recognise necessity in a situation of crisis. We are in a crisis and it is time for action. In 2020, 90 percent of the countries finish the year with smaller economies. In other words, poorer than at the start of it, the worst performance the world had during peacetime.

SOUNDBITE (Original), Kristalina GEORGIEVA, Managing Director of the International Monetary Fund, But it could have been much worse, exceptionally strong and coordinated actions by central banks and by financial authorities have played a critical role in mitigating the human and economic impacts. And here I want to pay tribute to Christine Lagarde and the ECB for reacting swiftly with extraordinary policy accommodation and also to all the governments of the EU for putting in place massive fiscal support of over three trillion euros for firms and for households, including job retention schemes that helped over 54 million workers.

SOUNDBITE (Original), Kristalina GEORGIEVA, Managing Director of the International Monetary Fund, And the next generation EU initiative is a remarkable achievement in joint mobilisation of funds. Bravo. These actions, together with unprecedented scientific advances on vaccines and treatment, many of those home grown in Europe and progress in applying masks, social distancing, testing, contact tracing have helped stabilise the economy and move the world and the EU towards recovery. So where what do we see 2021?

SOUNDBITE (Original), Kristalina GEORGIEVA, Managing Director of the International Monetary Fund, We are projecting global growth of five point five percent and four point two percent in the EU this year. But let me be clear, the path to recovery is highly uncertain and most importantly, uneven. Uncertain because of the ongoing race between a mutating virus and the vaccines. Uneven because of the difference in starting positions, economic structure, capacity to respond, causing inequalities to grow both across and within countries, and we heard the speakers before me quite concerned talking about that.

SOUNDBITE (Original), Kristalina GEORGIEVA, Managing Director of the International Monetary Fund, And it is my deepest concern that the great lockdown of 2020 could morph into a great divergence in 2021. Divergence is most profound in the developing world, where half of the countries that used to catch up in income levels with their wealthier peers are now falling further behind for the first time in decades. But divergence is a risk for the EU as well. Let me let me look at some of the obvious examples. Traditional tourist destinations, they have experienced much sharper contractions, more than nine percent last year in Spain, Greece and Italy, compared to an average contraction of six point four percent across the EU.

SOUNDBITE (Original), Kristalina GEORGIEVA, Managing Director of the International Monetary Fund, And we project that by the end of 2022 per capita income for the emerging markets of Central and Eastern Europe will be three point eight percent below precrisis projections compared to a shortfall of just one point three percent for EU's advanced economies. This is a negative impact almost three times larger that will slow the pace of convergence Europe enjoyed for decades. We also see increasing divergence within countries in the form of worsening inequality. Always happens in pandemic and it is happening again.

SOUNDBITE (Original), Kristalina GEORGIEVA, Managing Director of the International Monetary Fund, Regions with lower GDP per capita went into the crisis with low productivity, larger contact, intensive sectors, fewer jobs that allow for remote working. So of course they have been hit all the harder. And as we heard before me, when jobs are gone, it is women and young people suffering the most. So the big question facing policymakers everywhere and in the European Union is how can we ensure a strong recovery and tackle this threat of divergence at the same time?

SOUNDBITE (Original), Kristalina GEORGIEVA, Managing Director of the International Monetary Fund, First, the health crisis. This year, vaccine policy is the most important economic policy in Europe and around the world, and we all know it. Until we defeat the pandemic everywhere, we risk new mutations that threaten our progress. Scaling up production and I'm stressing this, we need to produce more and distribution of vaccines is critical. And so, too, is additional financing to secure doses, to pay for logistics, as well as to take timely reallocations. If we have excess supplies in a timely manner, move it to where it is needed. And all of this requires cooperation. It's not going to fall from the sky.

SOUNDBITE (Original), Kristalina GEORGIEVA, Managing Director of the International Monetary Fund, Second, fight the economic crisis. Until the pandemic is defeated, support for firms and households should continue. Gradual withdrawal has to follow, not precede, a durable exit from the health crisis. It matters internally within countries. It also matters in terms of spill-overs. A premature tightening of policy when worst hit economies are still deeply fragile could exacerbate divergence between countries. And while now is not the time to withdraw support, it is the time to ascertain the strength of insolvency regimes.

SOUNDBITE (Original), Kristalina GEORGIEVA, Managing Director of the International Monetary Fund, We have provided massive support in 2020 that led to lower than average bankruptcies, fewer bankruptcies than in previous years. When support declines and with structural change accelerating, the risk of higher rates of debt defaults will go up. And that is why insolvency arrangements, greater emphasis on equity support is so necessary to help prevent debt overhangs and rocketing bankruptcies.

SOUNDBITE (Original), Kristalina GEORGIEVA, Managing Director of the International Monetary Fund, Third and most important over the long run. Harness response to the crisis to spur structural shifts to digitalisation and power up again Europe's convergence engine, we have done some analysis. It shows that a coordinated green infrastructure investment push is really a must. It could boost GDP over a 15 year period by about zero point seven percent each year, creating millions of new jobs. Carbon pricing can help repair fiscal balances, channel private investments into green sectors, deliver substantial emission reductions.

SOUNDBITE (Original), Kristalina GEORGIEVA, Managing Director of the International Monetary Fund, Increased access to high speed Internet in rural and underserved areas would raise productivity. Education spending, investing in human capital, job training programmes would build the skills needed for the economy of the future and Europe can also step up reforms. I listened very carefully and I completely agree with the need to address persistent structural challenges. The New Generation EU can be more than a catalyst for economic transformation. It can be a forerunner to new shared fiscal tools to complement the ECB single monetary policy.

SOUNDBITE (Original), Kristalina GEORGIEVA, Managing Director of the International Monetary Fund, And you can take further steps toward banking and capital market union to spur growth, to spur integration. And last but definitely not least, efforts to make international corporate taxation fit for the digital age can boost revenues and it can help us address inequality. Let me finish with a word of thanks for your support to our work at the IMF during this crisis. From the outset, we swiftly recalibrated our policy advice. Our message "spend, but keep the receipts" was unusual for the fund, but appropriate for this crisis.

SOUNDBITE (Original), Kristalina GEORGIEVA, Managing Director of the International Monetary Fund, And we put our money where our mouth is. We provided over a hundred and five billion in new financing to eighty five countries in Europe. Those include Albania, Bosnia-Herzegovina, Kosovo, Moldova, Montenegro, North Macedonia and Ukraine. We adjusted our capacity development work to the needs and modalities of work. During the pandemic we strengthened focus on inclusive growth, especially working with you with our European partners on issues like progressive taxation and social spending.

SOUNDBITE (Original), Kristalina GEORGIEVA, Managing Director of the International Monetary Fund, And very importantly, stepped up work on climate change. It is a threat to economic and financial stability, and it is an opportunity for green growth and jobs. We have done an analysis of policies to reduce ambitious carbon emission reduction goals, and this analysis is exactly because of our commitment to put climate change at the heart of our work. We are working closely with you to do more for low income countries.

SOUNDBITE (Original), Kristalina GEORGIEVA, Managing Director of the International Monetary Fund, They face painful choices between tackling the health crisis, meeting people's basic needs fostering macroeconomic stability, boosting public investments. And what I want to say from my heart is that you and all the people of Europe can be proud of your assistance to vulnerable countries during this crisis, as you have done in many crises before. You have backed up all our efforts. You have contributed to our debt relief, to our concessional lending capacity, and you're seeking ways to do more, including through a new allocation to boost reserves without compounding that burden. And I greatly appreciate your finance minister's support in this regard. Thank you.

SOUNDBITE (Original), Charles MICHEL, President of the European Council, Thank you very much, President Sassoli. There was a slight problem with microphones, but thank you very much as president Sassoli. Thank you, President Ferro Rodrigues, for giving me the opportunity to address the conference. The European Parliament and the 27 national parliaments are obviously the beating heart of democratic discourse in the European Union national level. So thank you very much for giving me this opportunity to share one or two ideas with you when it comes to the future of our European project.

SOUNDBITE (Original), Charles MICHEL, President of the European Council, And to say something about some of the priorities that we feel are important. 2020 and 2021 most probably are going to be very important turning point years for the world and our European project. We have been very hard hit by the pandemic and we're still suffering from the pandemic and it is testing some of our certitudes and testing basically what we've been used to. And obviously we've also seen an acceleration of certain trends which probably existed before the pandemic.

SOUNDBITE (Original), Charles MICHEL, President of the European Council, I heard Kristalina Georgieva referring to some of these aspects. She said that 2020 has also been characterised by our ability to come together, not only our governments, but our European countries, together with our partner institutions, the European Parliament and the Commission, in order to come up with a very ambitious response to the crisis that is hitting us and also to be able to allow ourselves the necessary financial means also to combat the pandemic: 100 billion euro in in order to support social cohesion at the level of the European Union and to do very many other things as well.

SOUNDBITE (Original), Charles MICHEL, President of the European Council, And I think this commitment shows that institutional democratic commitment is absolutely essential. And I have been a privileged witness of the influence of the European Parliament in the debate, the dynamic nature of the parliamentary debates at the Council. Obviously, they've been very ambitious. I've also seen the their support for this concept of own resources because this is an absolutely essential reform for the future of the European Union. The idea is to invest together once we've taken out loans together. And I think you'll all realise that all of us are very much focussing on and gathered around these two main pillars in the post covid period.

SOUNDBITE (Original), Charles MICHEL, President of the European Council, We're talking about the fight against climate change. And then, of course, there's the digital pillar. These two pillars are extremely important because as far as I see it, they go to show that it's not just a kind of business as usual recovery plan and it's not a recovery plan as we would have had in the past. What we have now is a veritable project based on the change of paradigm. So we're talking a true paradigm shift and we have a new social model.

SOUNDBITE (Original), Charles MICHEL, President of the European Council, And the idea is to try and have some kind of impact on what goes on within the European Union, around the world, and also draw on our own strengths. And if I could say something about the digital the climate aspects, but also make another point and stand back a little and see how the member states and other countries around the world have developed. In reality, if we take a look at prosperity, development and progress that has been achieved over the past years, a lot of this has been based on a rampant exploitation of natural resources with the results we know.

SOUNDBITE (Original), Charles MICHEL, President of the European Council, And I think there is a greater awareness around the world that this rampant exploitation model is not a sustainable model, hence the need for a paradigm shift. And then in parallel, we've also noticed that we have the development of artificial intelligence or digital development, supercomputers. We've realised that the main resource, that resource number one in the coming cycle is the resource linked to the digital sector, big data.

SOUNDBITE (Original), Charles MICHEL, President of the European Council, And I would like to make the most of the opportunity I have in addressing you to say that when it comes to this particular natural resource, that this is what we really have to draw on and use it to stop the old exploitation model. We have to use digital tools and instruments in order to help us to encourage research and development, economic research and development and social development.

SOUNDBITE (Original), Charles MICHEL, President of the European Council, And at the same time, we have to make sure that when it comes to our democratic model and context, which is based on fundamental freedoms, the right to privacy, that all of that is respected and guaranteed. Citizens in Europe and around the world are not going to just sit back and accept that the resource of personal data is going to be used in an abusive way, i.e. without respecting this democratic context and fundamental freedoms.

SOUNDBITE (Original), Charles MICHEL, President of the European Council, And this is why I'd like to say that obviously the European Union is very much committed when it comes to developing and using this natural resource and also to ensure that we do have the necessary democratic and parliamentary scrutiny of what is actually going on. If I could come back to another point, which is very important as well, over the coming weeks, the national parliaments, the national governments are going to be drawing up their national recovery plans, the national recovery and resilience plans, and sending them to the Commission of the European Union.

SOUNDBITE (Original), Charles MICHEL, President of the European Council, And obviously, we have to make this a success story all together. We have to ensure that every euro is properly invested at the national level so that this does have a beneficial effect on recovery in terms of social cohesion, for example. And we have to ensure that the debates that are going on within the national parliaments, whether it is on the national recovery plans, all of this this goes hand in hand, in line with own resources and is characterised by democratic vital vitality.

SOUNDBITE (Original), Charles MICHEL, President of the European Council, Because obviously we want to ensure that the five hundred forty million citizens around the European Union feel properly involved in what's going on. And I'd like to perhaps put out a plea, We have this big meeting of parliamentary representatives at the national level, the European level, and this is a plea for the generation of young people, the so-called covid generation, those who are 20, 21 in 2020, 2021. I think all of us have realised that young people have seen their lives turned upside down.

SOUNDBITE (Original), Charles MICHEL, President of the European Council, And these are young people who only a short time ago were out in the streets protesting about climate change and trying to make all of us aware of what needs to be done. And they're having to do home schooling. And it's extremely difficult, of course, for them to go and do their training properly in companies, etc.. And we're thinking in terms of the climate goals 2050, there are other targets that have been said that we need to meet by 2030. We have the digital and digital agenda. And I think we have to ensure that the digital and climate change transitions are mobilised properly so that they can have a positive impact for our young people.

SOUNDBITE (Original), Charles MICHEL, President of the European Council, In a few months time we have a very important meeting in Lisbon with the entrepreneurial sectors, the social partners, and that we're going to be looking at the digital transition, environmental transition, and that is going to be a specific moment in time. And we have to make the most of it to set out very specific priorities and objectives for the recovery plans. And we have to provide some kind of horizon, some prospects for our young generations and our young people so that they don't see their dreams shattered.

SOUNDBITE (Original), Charles MICHEL, President of the European Council, The young people represent a force of innovation and energy, and we should not lose sight of the young people. So all of the decisions that we are going to be taking, we have to take account of the future generations. We want a fairer, more just and greener Europe. And this is the ambition that I wanted to try and get across to all of you this afternoon in addressing the European Parliament and the national parliaments. So thank you very much for giving me this opportunity to set this out.

SOUNDBITE (Original), Ursula von der LEYEN President of the European Commission, Thank you president, President Ferro Rodrigues, honourable members of the European Parliament and of the national parliaments. Your presence today testifies a very simple fact. Our recovery plan, next generation EU belongs to all Europeans. We crafted it here in Brussels with one objective in mind. All European countries should have the resources to lift their people out of this crisis and particularly those countries that have been hit the hardest.

SOUNDBITE (Original), Ursula von der LEYEN President of the European Commission, All Europeans must be given a chance to recover from the current crisis, and this is why Europe will raise 750 billion euros and distribute them these resources to all member states. It is kind of a helping hand from Europe to all Europeans. And I'm glad that recently the European Parliament has approved a recovery and resilience facility by an overwhelming majority. Over 80 percent of the House has supported our proposal. Today, Europe is united in the fight against covid, but this shows we remain united in recovery.

SOUNDBITE (Original), Ursula von der LEYEN President of the European Commission, Now it is up to every country in our Union to make good use of this opportunity made in Europe. Seven European countries, including Portugal, have already ratified the own resources decision. That is how we will fund next generation EU and I encourage all of you to do the same. As a matter of urgency, because only with a ratified own resources decision can we put the fuel in the recovery and the people of Europe cannot wait. Our collective future is now entirely in your hands, the hands of the parliaments in Europe.

SOUNDBITE (Original), Ursula von der LEYEN President of the European Commission, The next step will be to bring Next Generation EU into life in each of your countries. Europe is providing every member state with a unique opportunity to kind of restart its economy. It's up to you to seize this opportunity. And you've just heard from Antonio Guterres. The recovery is not about turning the clocks back to a year ago. This is the time to build forward better, as you said. And with Next Generation EU we can shape a better economy for Europe. Of course, our most urgent task is to help healthy businesses pull through the crisis and create new jobs.

SOUNDBITE (Original), Ursula von der LEYEN President of the European Commission, But as we do so, we should also aim at making Europe greener, more digital and more inclusive. And today, I would like to give you three examples of what Next Generation EU can do in your countries. First, next generation EU can cut our CO2 emissions while creating jobs already in the short term. And let me show you how with a very basic example. The construction sector was hit very hard by the lockdowns and it has not fully recovered yet. Next generatio EU can help fixing this.

SOUNDBITE (Original), Ursula von der LEYEN President of the European Commission, Over half of residential buildings in Europe are more than 50 years old. Millions of Europeans are used to draughty windows and oiled old boilers. This isn't just uncomfortable in cold times. It is a massive waste of energy. With next generation EU, we would like to launch a renovation wave of residential buildings all across Europe. And this will cut our emissions, make our homes more comfortable and breathe new life in the construction sector.

SOUNDBITE (Original), Ursula von der LEYEN President of the European Commission, Is this the right solution for your country or your region? Only you can tell us, you know best what kind of green investment your country needs most. Yet from energy infrastructure and hydrogen valleys to the restoration, perhaps, of forests and biodiversity. So national recovery plans represent the opportunity to make your country greener while lifting up the economy.

SOUNDBITE (Original), Ursula von der LEYEN President of the European Commission, The second example. Next Generation EU can and should start off a digital decade for Europe. This is, of course, about building the infrastructure our businesses are longing for from 5G and 6G to safe data spaces. But this is also and I would say crucially, about our most important asset, and that is people. During the pandemic, businesses of all kinds have digitalised their operations like never before. Some simply started, for example, selling their products online. Many others invested in new software or new applications on artificial artificial intelligence.

SOUNDBITE (Original), Ursula von der LEYEN President of the European Commission, Not all workers and businesses are keeping pace with such rapid innovation. Next generation EU has something for them, too. It can finance digital education for workers who see their workplace changing before their eyes. For those who've lost their jobs and need to learn new skills, for example, next generation is there, too. But also for teachers or other public sector workers, for example, it can help business owners who are not digital natives to find the digital solutions they need in a changing world.

SOUNDBITE (Original), Ursula von der LEYEN President of the European Commission, And here again. Every European country has specific needs from networks to e-government, from innovation hubs to perhaps digitalising your schools. This is the moment for each member state to chart its own path into Europe's digital decade. And last but not least.

SOUNDBITE (Original), Ursula von der LEYEN President of the European Commission, We must make sure that all Europeans get a fair chance to move out of the crisis. Some have described the pandemic as the great equaliser. This is so untrue. And the other speakers mentioned it, women lost their jobs more easily than men. Young people looking for their first job were often discouraged. The coming months will be crucial to address these rising inequalities and build a fairer economy for the future.

SOUNDBITE (Original), Ursula von der LEYEN President of the European Commission, And since the start of the pandemic, Europe has already taken action, we reinforced, for example, the youth guarantee so that all Europeans under the age of 30 who come out of education or lose their job can get a new opportunity within four months. Or we launched a pact for skills to give workers the skills they need in an evolving labour market. And more proposals will come in early March, when we will present our action plan to implement the European pillar of social rights ahead of the social summit in Porto.

SOUNDBITE (Original), Ursula von der LEYEN President of the European Commission, And again, next generation EU will bring fresh resources to invest in skills in equal or equal opportunities for women and for the younger generations. This is the moment to bring the social dimension into the recovery. Well, these are the goals we have agreed together with the 27 governments and the European Parliament, a green recovery, a digital recovery, a fair recovery for all. This is the only path towards a resilient recovery. A recovery that can stand the test of time.

SOUNDBITE (Original), Ursula von der LEYEN President of the European Commission, And in the coming months, every country will have to come up with the best projects and reforms to make the most out of next generation EU. We encourage national parliaments to contribute to this process. The resources will come from Europe, but the ideas must come from every country. We need your scrutiny and your commitment to turn European investment into local growth. And the European Parliament will be involved every step of the way, every national plan will be transmitted to the European Parliament. The Commission will listen to your views and regular dialogues, and we will take them into account in assessing the plans. It's a matter of transparency.

SOUNDBITE (Original), Ursula von der LEYEN President of the European Commission, Because next generation EU belongs to all Europeans. And I know it may sound strange to talk about recovery as the pandemic still rages on, these are difficult weeks in Portugal and in other places across our continent. Today, we are not yet where we would like to be in combating the virus. We have to find rapid responses, for example, to the rising threat of variants. And this is the reason why the Commission launched the HERA incubator last week, that is a public private corporation of science, the health sector authorities like the EMA and industry.

SOUNDBITE (Original), Ursula von der LEYEN President of the European Commission, To screen for variants, if necessary to adapt the vaccines, then to steer clinical trials in Europe and most important, to manufacture existing and new vaccines at mass scale manufacturing. I have no doubt that Europe will recover. All countries, big and small at the four corners of our continent will recover from this health crisis together. And when all 27 will have ratified the own resources decision, new oxygen will flow into our economy.

SOUNDBITE (Original), Ursula von der LEYEN President of the European Commission, Next generation, EU is for all of Europe and all of Europe will share in its success. In every capital and every government and parliament across our continent. In other words, Europe needs all of you, all of us. Europe will be what we want it to be. So let's all go to work. Thank you for listening to me and long live Europe.

SOUNDBITE (Original), Christine LAGARDE, President of the European Central Bank, President Sassoli, President Rodrigues, President Michel, President Von der Leyen, Secretary General Guterres, managing Director Georgieva, honourable members of the European Parliament and national parliaments, ladies and gentlemen. First of all, I would like to thank you warmly for inviting me to speak to you today. It's a privilege to be able to talk to the citizens representative at the heart of European democracy.

SOUNDBITE (Original), Christine LAGARDE, President of the European Central Bank, Events like this one allows us to consider national debates in discussions about our common challenges as Europeans. For all of us, the posture of the pandemic has been an extraordinary challenge. And at all levels, the public policy response has been truly impressive. National responses have spearheaded the policy effort with fiscal measures amounting to, on average, four point five percent of euro area GDP. Yet the response to this crisis stands out from previous ones in that the level of policy alignment achieved has been truly unprecedented.

SOUNDBITE (Original), Christine LAGARDE, President of the European Central Bank, The strength of Europe's crisis response is crucially dependent on the strength of national and European responses across all areas monetary, fiscal, supervisory and regulatory. But the pandemic is not over yet. Policy alignment that I've just described will continue to be imperative for what lies ahead. So what I would like to do briefly, because I know that there's a long list of very eminent speakers before me, and you probably have had a lot of speeches so fa... But I'd like to look at just ways in which our policies can keep reinforcing each other in addressing two common challenges from all corners of Europe.

SOUNDBITE (Original), Christine LAGARDE, President of the European Central Bank, One, shielding the economy. And two, subsequently transforming the economy. Let's look at the shielding first. While people are drawing hope from the start of vaccination campaigns, the first challenge, shielding, calls for us to continue to bridge the gap until widespread immunity is achieved, so vaccination, vaccination, vaccination. Across Europe, people are still grappling with the economic and social consequences of the pandemic.

SOUNDBITE (Original), Christine LAGARDE, President of the European Central Bank, And it is still highly uncertain how the next stages of the pandemic will unfold, as President Von der Leyen just indicated. In this context, our pandemic emergency purchase programme has been tailored to the pandemic, helping to stabilise markets and ease our policy stance to support the recovery. It will continue to be a crucial tool. The pact envelope of one thousand eight hundred and fifty billion euros gives us considerable firepower and flexibility in conducting purchases.

SOUNDBITE (Original), Christine LAGARDE, President of the European Central Bank, Moreover, targeted longer term refinancing operations will remain an attractive source of funding for banks supporting the flow of credit to households and to firms. SMEs tend to benefit disproportionately from abundant and cheap credit, and smaller firms have been able to borrow at the lowest rate ever recorded. The ECB will continue to support all sectors of the economy by preserving favourable financing over the pandemic period, as it has done ever since the start of the crisis. We will continue doing it.

SOUNDBITE (Original), Christine LAGARDE, President of the European Central Bank, This commitment implies looking at indicators along the whole transmission chain of our monetary policy, from risk-free rates to governments borrowing costs, to capital markets, to bank lending for firms and bank lending to households. Within the broad based set of indicators that we monitor to assess where the financing conditions are, in fact still favourable. Risk free rates and sovereign yields are particularly important because they are good early indicators of what happens at downstream stages of monetary policy transmission, since banks use those yields as a reference when setting the price of their loans to households and to firms.

SOUNDBITE (Original), Christine LAGARDE, President of the European Central Bank, Accordingly, the ECB is closely monitoring the evolution of longer term nominal bond yields. The overall policy mix, however, remains essential. While the pandemic persists and lockdowns and heightened uncertainty continue, firms and households will only be able to take full advantage of those favourable financing conditions if national policy measures are deployed to help monetary policy unfold its full potential. By continuing to take the lead in protecting the firms and sectors most exposed to the crisis, fiscal policy can help brighten economic prospects for firms and households, thereby strengthening the monetary policy transmission.

SOUNDBITE (Original), Christine LAGARDE, President of the European Central Bank, Let me give you an example, the ECB's consumer expectations survey demonstrates it. People who consider government support to be more adequate display less precautionary behaviour, and those people are in turn more likely to respond to favourable financing conditions and increase their consumption. In the euro area, the budget balance is expected to be minus six point one percent of GDP in twenty twenty one.

SOUNDBITE (Original), Christine LAGARDE, President of the European Central Bank, With monetary and fiscal policies working in tandem, we hope that we finally cross the bridge and reach the other side of the pandemic on solid ground. So let's turn to the transforming of the economy. Because that challenge will arise as the economy gradually reopens and it will be quite a different one. Won't be about returning to the pre pandemic status quo. It will be about bringing the economy rapidly back to potential while using the thrust of the recovery to transform our economies.

SOUNDBITE (Original), Christine LAGARDE, President of the European Central Bank, And the focus will then be on reducing the damage caused by the pandemic, such as permanent job reductions, which one in five firms are considering. Fixing those crushed dreams that young people had before the pandemic. At the same time, it will be crucial to harness the potential offered by the pandemic, which has spurred the multiyear leap in digital progress and has brought a new focus on sustainability.

SOUNDBITE (Original), Christine LAGARDE, President of the European Central Bank, Digital and green technologies present massive possibilities for more vibrant, inclusive and sustainable growth. In the energy sector alone, scaling up green investment to the necessary levels could create an estimated one point one million jobs across Europe by 2030. Europe is leading the way in addressing this double policy challenge, you just heard it. It's next generation EU, that I call NGU. This recovery package is designed to support demand today and generate growth potential tomorrow through investment and through reforms. And indeed, energy use is expected to provide, on average, around one percent of GDP in grants and loans per year over the next three years, while committing thirty seven percent of funds to green investment and 20 percent to digital, as you just heard from the president of the Commission.

SOUNDBITE (Original), Christine LAGARDE, President of the European Central Bank, Next to EU policies. National policy action will have to play a vital enabling role in smoothing the transition and promoting change. First, by ensuring that NGU funds can be fully operational when the decisions on own resources are ratified in all member states, which in many cases involves national parliaments. Second, by creating the right economic environment to boost the impact of NGU, and that means improving the quality of government spending and ensuring that NGU is firmly rooted in sound structural policies conceived and implemented at the national level.

SOUNDBITE (Original), Christine LAGARDE, President of the European Central Bank, If used for productive public investment NGU funds could increase real output in the euro area by around one point five percent of GDP over the medium term. So these must be priority areas if we are to reform, modernise and come out of this crisis on the other side of the bridge with renewed vigour. So let me conclude by emphasising that all of us across all policy levels must pull together to meet our shared challenges and ensure that Europe can emerge stronger from the pandemic.

SOUNDBITE (Original), Christine LAGARDE, President of the European Central Bank, Today, the 22nd of February is the birthday of Lord Robert Baden-Powell, the pioneer of scouting. The Scouts motto: "toujours prets - be prepared" is apt for us to. For Europe to be prepared and bring about positive change in 2021 and beyond, national and European decision makers need to uphold our team effort. We can be ready together. The ECB will continue to play its part, I can assure you. Thank you.

SOUNDBITE (Original), David SASSOLI, EP President, Thank you very much, President, we've heard some very important contributions about the instruments that have already been enacted. And the responsibilities and challenges that face us in the near future. As President Lagarde told us, we need to be prepared and the best way to be prepared is to not stop.

SOUNDBITE (Original), David SASSOLI, EP President, As you'll have heard from our speakers this afternoon, the recovery is an uncertain one and it will be an unequal one. It will more profoundly affect people's lives than we ever could have thought. So we cannot stop our efforts. We have to ensure. This year, the lessons learnt from covid could be the basis for a profound transformation of our economy and certainly not some kind of turning back the clock. I'd like to thank all of the presidents of the institutions for their contributions. We've been able to mobilise and even invent instruments we haven't stopped, but now we need more inventions and more imagination.

SOUNDBITE (Original), David SASSOLI, EP President, Well, we're concluding this first panel, I'll give the floor to President Ferro Rodrigues and then I'll invite the vice president of the European Parliament to get ready to chair the second panel, which will be on the preparation of national recovery and resilience plans, a state of play. Thank you very much.