The trade war is gaining momentum. Domański: We must take all steps to protect Europe

Our task is to take all steps to protect European citizens and European companies in the context of American duties – emphasized at the first day of the informal Ecinus meeting in Warsaw, the Minister of Finance Andrzej Domański.

In Warsaw, an informal meeting of the EU Council for economic and financial (EcoFin) began, in which finance ministers and bosses of the Bank of Central European Union countries took part in Warsaw.

“We discussed macroeconomic implications of commercial dispute between the USA and the EU today. We see a negative impact on the economy and tensions it causes, and although we think that the negative impact on GDP will be greater in the case of the USA than the EU, our task is to take all steps to protect European citizens and European companies,” said Minister of Finance Andrzej Domański during a press conference.

He added that “ministers confirmed full support for the definite and calm approach of the European Commission, which decided to suspend retaliation.”

The EU Commissioner for Trade Valdis Dombovskis estimated that the imposition of American duties to virtually the whole world is a mistake and that taking over their EU is not in line with the “logic of business partnership, whose value is EUR 1.6 trillion.”

“The EU has suspended our retaliation for 90 days, but they still remain 10 % duties, introduced earlier and 25 % duties on steel and aluminum as well as for cars and car parts”-noted Dombrovskis. He added that “we must demonstrate calmness in reactions, but all options are on the table.”

Dombrovskis was also asked about the national industrial support packages planned by some governments, which were affected by duties and whether the EC is planning similar activities on an EU.

“On the EC side, the first rating is that we must be careful in our fiscal reactions, we had Covid, we had Russian aggression on Ukraine and we already have an elevated level of deficit and debt, which needs to be kept in mind,” he said and added that industries affected by duties are already “present in our political activities.”

During the informal meeting of Ecin, the Union of Savings and Investment was also discussed, which aims to increase the competitiveness of the EU capital market, reduce its fragmentation and more effective use of EU savings of citizens, which amount to about EUR 10 trillion.

“Today everyone agreed how important the process of increasing the EU resistance to threats is and that there is a need for rapid action for the Union of Savings and Investment. We talked about the need to accelerate work on the Union, and in its framework on securitization (it is about converting debt, e.g. in banks for market papers, e.g. bonds – PAP),” said Domański.

He said that he was hoping that during the Polish presidency it would be possible to accelerate work on the termination of the issue regarding securitization and that the European Commission will present its proposal in this respect in the second quarter of this year.

The subject of the Union savings was raised, among others during a joint session of finance ministers and heads of central banks.

“Many years ago we agreed that banks play too big a role in the European economy. It is high time to change it. Banks do not fulfill their tasks when it comes to financing the corporate sector, in particular – innovative projects. Therefore, we can consider introducing encouragement for households so that they move some of their large savings from banks to the capital market,” said Polish President. Central Bank Adam Glapiński.

On Saturday, the informal EcoFin meeting will be continued. This time its members are to focus on the issue of financing European arms expenses. As part of the recently announced Rearm Europe plan, the European Commission proposed to accumulate about EUR 800 billion from the budgets of member states as well as loans and loans for arms purposes. (PAP)

MS/ Mick/