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Council of finance ministers in Stockholm

Last update: 29.04.2023 12:00

How to achieve sustainable public finances, help households and businesses with rising energy prices, and finance and support innovation in the EU. These topics were also on the agenda of the informal Ecofin Council meeting of EU finance ministers held in Stockholm over previous days. Slovakia was represented at the meeting by Ľuboš Jančík, State Secretary of the Ministry of Finance of the Slovak Republic.

The representatives of the countries agreed on key conclusions concerning the reform of budgetary management and the reduction of public debts. Countries need to start reducing the so-called primary deficit of public finances as soon as possible, and when reducing deficits, countries need to take into account spending on defence and climate change.

Thus, Slovakia's role is to continue to push for deficit reduction, fight tax evasion, and report transparently on the implementation of economic indicators and rules.

More detailed conclusions of the meeting:

  • Financing future growth in Europe

The discussion was based on documents prepared by SE PRES and the think tank New Financial assessing the EU capital markets and the role of the European capital market in financing the next generation of businesses.

The EU faces a number of transformational challenges that could be addressed through the EU capital market. With the aim of its development, the Commission came up with the Capital Markets Union 10 years ago. However, the single market has still not been created. 60% of the barriers remain the same as they were 30 years ago. Therefore, regulation is required to pursue the objective and more harmonisation and further simplification of the rules is needed.

The EU lags far behind the US, where the level of funding of companies in the early stages is 6 times higher. In the EU, 75% of corporate financing is still provided by banks; in the US the ratio is reversed.

At the same time, more involvement of retail investors is necessary. In this context, the forthcoming Retail Investment Strategy (RIS) should be a step in the right direction. The Commission has stated that a Capital Markets Union will provide companies with access to efficient financing, increase competitiveness and make the EU economy more resilient.

  • Long-term perspective on fiscal stabilisation policies

Ministers discussed long-term fiscal stabilisation and the sustainability of public finances, particularly in the context of the pandemic and high inflation. Ministers and representatives of finance ministries held an open debate on priorities and optimal fiscal policy settings for the future.

  • Reconstruction of Ukraine and coordination of support

The ministers also discussed support for Ukraine's reconstruction. The Minister of Finance, S. Marchenko, made the opening remarks, summarising the results and progress achieved by the Ukrainian government over the past year in the economic sphere (compared to 2022, the UA's GDP growth is estimated at 3.2% of GDP). He emphasised the key impact of the support provided by international partners, particularly the International Monetary Fund (IMF) and the European Union (EU). However, he also pointed to the persistent financing gap in covering the identified recovery and reconstruction needs for 2023 (RDNA2), which the World Bank has quantified at $14 billion.

Adding up the commitments confirmed so far by the EU, the US, and Japan, as well as the identified UA budget space to cover these needs this year, the financing gap still remains. Mr. Marchenko concluded by emphasizing the impact and key role of sanctions and the need to close the implementation gaps.

In the subsequent discussion, the ministers reaffirmed their commitment to support the UA, stressing the necessity of coordination of international partners in several aspects. A number of ministers emphasised the need to involve the private sector in the reconstruction process, as well as the importance of adopting reforms as part of the reconstruction and modernisation of the AU.

Press Department
Ministry of Finance of the Slovak Republic