Dombrovskis: "Peace, stability and prosperity can no longer be taken for granted"

Latvian EU Commissioner Valdis Dombrovskis warned January 7 that "there are clouds on the horizon" as far as the European economy is concerned.

"We have a presidential election coming up in the United States. Trade tensions continue and the future of the World Trade Organization hangs in the balance after its top court shut down. Closer to home, the UK is about to leave the European Union. The world is undergoing changes of a magnitude that will have a profound impact on Europe's position in the international arena," the former Lavian prime minister warned an audience at the WELT Economic Summit in Germany.

"Yes, we weathered the storm. But I think everyone here this evening is aware of the risk of inaction and poor fiscal coordination," said the man who steered Latvia through a path of extreme austerity during his time as prime minister 2009-14.

"Manufacturing has slowed down, partly as a result of trade tensions. This has an especially negative impact on export-oriented economies with a strong manufacturing base – like Germany," .

"The possible prospect of the US imposing restrictions on cars will be just one of Germany's economic concerns for the New Year, he said.

"All these developments will profoundly transform our economies and societies. They need to be managed effectively and fairly so that the economy works for people. My new job title, in fact," he said, referencing the fact that his job title these days is "Executive Vice-President for an Economy that Works for People".

While the European economy is "a powerful force in the world" it requires further deepening the Economic and Monetary Union which "remains a top priority," he said.

"It needs more reform, so that the EU can project its economic weight and affirm its economic sovereignty. For this, we need strong national economies. They are meant to build fiscal buffers in good times for later use when the economy slows down," Dombrovskis said, adding that he also wants "to strengthen the international role of the euro".

"The current geopolitical context shows that peace, stability and prosperity – the notions that are at the very heart of the European project – can no longer be taken for granted," he concluded.

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