1. European Growth Model 2.0: Twin Transition and Fiscal Rules Reform 2. Amidst the challenges faced in 2023, Europe aim

1. European and national policies to stimulate growth/investment National Bank of Poland Warsaw on October 20th Marco Buti – Tommaso Padoa-Schioppa Chair in European Economic and Monetary Integration - EUI

2. Main challenges in 2023: twin transition Additional needs related to the green and digital transitions estimated at €650 billion per year until 2030 private and public investment • Twin transition Additional EUR 650 bn per year until 2030 Green transition: EUR 520 bn Digital transition: EUR 125 bn RepowerEU Communication estimated additional investments of €300bn (EUR 2022) from now until 2030 for reducing our reliance on Russian fossil fuel imports. • Communication network, Cloud, Common EU data space Energy and transport 390 bn 56 bn Reassessed given the higher energy prices and IRA • Other Semiconductors/photonics, HPC, Graphene, Quantum and other environmental objectives 130 bn 69 bn RRF resources will not be enough • Source: COM(2022) 83 - Towards a green, digital and resilient economy: our European Growth Model 2

3. Reform of the fiscal rules: dealing with four EU challenges Macroeconomic stability Stagflation risk Financial fragmentation Sustainable growth Political cohesion Reform of the fiscal rules Competitiveness – IRA response Twin transition New EU industrial policy 3

4. Old and new fiscal rules KEY ISSUE OLD RULE NEW RULE Budget balance 3%, MTO 3%, Country-specific adjustment 60%, Country-specific debt reduction path Public debt 60%, 1/20th Promotions of reforms and investments Investment and reform clauses From 4 to 7 years national plans Multiple quantitative factors Simplification Debt reduction-anchor Incentives to foster national ownership Enforcement Pecuniary sanctions 4