Within 24 hours of landing in Brussels, U.S. economy chief Janet Yellen had successfully stalled EU plans for a digital levy and told national governments how to run their economies.
Yet EU officials had nothing but effusive praise for their American visitor.
“We could say that in terms of our relationships with the U.S. we have gone from a winter of discontent to a summer of cooperation,” Economy Commissioner Paolo Gentiloni told journalists on Monday evening.
The former chair of the Federal Reserve is in town to hold meetings with commissioners and EU finance ministers — and to protest against a planned digital levy.
The European Commission confirmed Monday it would bow to U.S. demands to put its plans on hold until the fall. Washington has been arguing strongly against the plans, warning the tax would unfairly target U.S. tech giants and undermine a global tax accord endorsed by G20 finance ministers over the weekend.
But despite being forced into an embarrassing U-turn on a flagship proposal, top officials gushed over Yellen’s visit.
After years of tempestuous relations with the Donald Trump administration, Gentiloni said it “symbolized a new transatlantic period.”
Klaus Regling, chair of the EU’s bailout fund, praised Yellen’s support for multilateralism — a marked change from the previous administration — and her reference to the “common challenges” facing the EU and U.S.
“It reminded me of the last time that [a] U.S. secretary of the Treasury joined a Eurogroup meeting. This was almost 10 years ago in September 2011 when Tim Geithner came to Warsaw,” he said.
Meanwhile, Yellen used her guest appearance at Monday’s meeting of EU finance ministers to give them some economic pointers.
According to prepared remarks, the U.S. Treasury secretary warned the EU to keep money flowing to its economies through next year. She said member countries should “seriously consider additional fiscal measures to ensure a robust domestic and global recovery” amid ongoing uncertainty about the economic recovery.
Yellen also waded into the debate over the future of the EU’s budget deficit rules by calling for “sufficient flexibility” within the so-called Stability and Growth Pact framework.
“The fiscal framework should support an economy of the future and not lead to pro-cyclical economic outcomes,” she said in the remarks.
But while that advice — which aligns more with the stance of countries such as Greece and Italy, than the other camp of Germany, the Netherlands and others — could have stepped on toes, ministers glossed over any potential frictions.
“The spirit in which Secretary Yellen made that point was a spirit in which all members of the Eurogroup would agree, which is namely that our efforts with this pandemic are far from finished,” said Eurogroup President and Irish Finance Minister Paschal Donohoe.