Reviewing Slovenia’s EU presidency: economic recovery after the pandemic

Digital in-conversation with Andrej Šircelj, Minister of Finance; and Peter Mandelson, Chairman of Global Counsel, discussing Slovenia's presidency of the Council of the EU, prospects for economic recovery after the pandemic, and the ECOFIN's approach to the sustainable finance agenda.

Highlights from the discussion:

• Successful post-pandemic recovery is contingent upon simplification of EU’s fiscal rules. The EU Recovery and Resilience Facility supports the implementation of long-term investment and structural reforms in member states. Making the distribution of recovery funds conditional on concrete targets is a crucial motivating factor in this respect. However, encouraging growth and investment in the EU necessitates flexibility in fiscal measures. Šircelj emphasized the need for tailored set of criteria for different markets in Europe as a way of improving investment landscape in member states.
   
• Achieving energy independence in the EU would be challenging without new sources of green energy and investments flows. Despite the clear need for energy diversification and new renewable energy sources, member states and EU institutions continue to share diverging views on whether gas and nuclear energy should be classified as “green energy sources.” Another contentious issue in the EU’s new taxonomy package of legislative proposals, where flexibility might be the best way forward, is the question of “green” bonds standardisation and whether European capitals would favour voluntary over mandatory labelling, without running the risk of greenwashing.
   
• Lastly, a competitive EU financial sector and an integrated capital markets union should not come at the expense of consumers. The recent Commission proposal on the Capital Markets Union seeks to leverage the potential of capital markets to finance the economic recovery, but should be advanced the highest consumer protection safeguards. The proposed ban of payments for order flow and greater insistence on cybersecurity aspects in digital finance proposals could slow much sought investment flows, but ensure retail investors and consumers feel they are on the safe side. The importance of improving financial literacy amongst EU citizens is also a key component to this.