First of all I want to warmly congratulate Paschal on his election. You are taking over at a time of unprecedented challenges, but I know that you have what it takes to forge a strong consensus and chart an ambitious way forward. It is not just a question of managing the current crisis, but of making the euro area stronger, more resilient, as well as fairer and more sustainable. You can count on the Commission to be a reliable partner in that sense.
Let me also take this opportunity to say a final word of thanks to Mario for his hard work. I had the opportunity to cooperate with Mario only in the last seven months, but they were very challenging months. Your leadership, Mario, with your relaxed determination, brought the Eurogroup to overcome difficulties and reach agreements.
I outlined to the Eurogroup the main findings of the Commission's Summer Economic Forecast, which I presented last Tuesday. The pandemic has hit the European economy harder than previously expected. Moreover, the risk of increasing divergence, which was the rationale for proposing our common recovery plan, is now clearly materialising. And while we have been seeing many encouraging signs of a rebound since May, our forecast shows that the road to recovery is still paved with uncertainty.
We also had a useful discussion on the fiscal stance in the euro area, taking as our starting point the report of the European Fiscal Board published last week. In 2020, we see a fiscal impulse of around 3.5% of GDP for the euro area: this is the highest stabilisation effort in the last 20 years. Our forecast estimates that the fiscal policy action taken will have a positive impact on real GDP of around 5 percentage points in 2020. In other words, this was the right thing to do. We are not calculating our recovery packagein this positive impact.
The report of the European Fiscal Board has put a number of key considerations on the table, notably:
-the need to provide further fiscal support in 2021;
-the recommendation to clarify the duration of the general escape clause;
-and the idea that the return to pre-pandemic GDP levels should be the reference for a decision to lift the general escape clause.
This is a discussion that will take place in parallel with that on the review of our economic governance, which was launched earlier this year but put on pause because of the pandemic.
The review was eclipsed by events, but not rendered irrelevant by them!
On the contrary, the fiscal response to the pandemic adds a key new dimension to the review of our economic governance which we must absolutely take into account when formulating conclusions next year.