Let me begin by thanking our Irish hosts for their warm hospitality.
We started today’s meeting with a broad discussion on the latest economic developments in the euro area. The European Commission and the ECB presented their assessments, while Aurore Lalucq brought the perspective of the European Parliament’s Committee on Economic and Monetary Affairs.
The first message is a positive one.
The euro area economy has proved stronger than we expected at the beginning of this year. Growth in the second quarter was better than projected and, on current evidence, this momentum should continue to support economic activity through the end of 2026.
Europe has shown that it is resilient. The task now is to turn this resilience into strength. Because, at the same time, the challenges are multiplying.
First, in the geopolitical environment.
Developments in the Middle East are once again putting upward pressure on oil and gas prices, with direct consequences for our citizens and our businesses.
This is not the first time we have faced an external shock of this kind. And that is precisely why the lesson should be vivid and clear. We cannot control every crisis that erupts beyond Europe. But we can reduce our dependence on events beyond our borders.
That is why we need to accelerate our path towards greater energy independence. This is about our economy, our competitiveness and our security. And today, it is more urgent than ever.
Second, global financial conditions are tightening. This is also reflected in sovereign bond yields and, for as long as these conditions persist, the pressure on national budgets will increase.
Yields have risen across all major economies, for broadly the same reasons: energy prices and large global demand for capital.
Spreads within the euro area remain contained compared with what we have experienced in the past. And that matters. Europe has lived through crises in which uncertainty translated itself into economic instability. That is not what we are seeing today.
Today’s stability was achieved through difficult decisions, stronger institutions and more responsible fiscal policies. And this we must preserve .
In times of uncertainty, credibility becomes an economic asset. It protects our economies and expands the choices available to us.
That is why we need to stay on the fiscal path that we have agreed. This is essential to maintain favourable financing conditions and safeguard the long-term sustainability of our public finances.
And if new measures are needed in response to higher energy prices, they should be targeted, temporary and consistent with our fiscal rules.
Our objective must be to protect citizens when conditions become more difficult, without creating new burdens for the future. To act early and effectively while preserving the stability of our economies. To protect today, without mortgaging tomorrow.
At the same time, we need to increase investment in defence, digitalisation and energy – investments that can also strengthen growth. And we need to look at how we can make our public finances more effective. The Eurogroup will return to this issue next month.
The second major discussion today focused on productivity and growth, with OECD Secretary-General Mathias Cormann, who presented the OECD’s assessment of the challenges that Europe is facing.
This discussion actually comes at a quite critical moment.
Two years after the Draghi report and following the competitiveness priorities set by the Eurogroup in November 2024, important progress has been made.
But the world is moving faster than we are. And that needs to change.
So today, our focus was not only on where we stand, but above all on what we need to do next and how quickly and at what scale we can do it.
Productivity and competitiveness will determine Europe’s place in the world. They will determine whether we can grow, create better jobs and higher incomes, finance our security, technology and energy transition, and preserve a strong European social model.
Productivity is the foundation of European prosperity and European strength.
One key priority in this regard is human capital. In an economy being transformed at extraordinary speed by technology and artificial intelligence, we need to invest more in skills and adapt our education systems to the needs of a new era. The OECD’s evidence shows that we still have significant ground to cover. We cannot expect Europe to be at the forefront of technological change, if our skills are falling behind.
It is equally important to direct capital, labour and technology towards where they can be most productive, to raise productivity in services, and to accelerate the diffusion of innovation across the economy.
And this brings us to one of our central challenges: turning more of the capital, technology and innovation that Europe generates into economic value here in Europe.
That is why mobilising European savings and deepening the Single Market are so important. We have the resources. We need to create the conditions for them to flow into productive investment and into companies that can grow and scale across Europe.
Europe needs to retain more of the value that it creates.
That is why the central message from today’s discussion is exactly this. We have identified the challenges and, to a large extent, we also know the solutions. Now we need to show that we are capable of delivering them.
The world is not waiting. Europe cannot afford to wait either.