Economic growth challenges and responses
Economic growth challenges and responses
The global economy continues to recover from the pandemic, Russia’s invasion of Ukraine and the cost-of-living crisis. Despite war-disrupted energy and food markets and monetary tightening to combat decades-high inflation, economic activity has slowed but not stalled. Even so, growth remains slow and uneven, with widening divergences and inflation, which was already an issue before the war in Ukraine, remains a central concern in OECD countries.
This succession of crises hit the European Union harder than its competitors. Since 2020, existing economic and fiscal heterogeneities across EU Member States have been exacerbated and the debt burden in some Member States, which was already concerning before the Covid crisis, is increasing.
Europe has entered a period of persistent inflation with slow growth although unemployment remains relatively low. Inflation has started to decline but is too high, above the 2% target. Labour productivity is stagnating, or even declining in the main countries of the euro zone notably due to the cyclical downturn, lack of productive investment and insufficient innovation. Growth prospects in Europe for 2023 and 2024 are weak.
Consequently, the EU and the eurozone have to embark on the right course: fighting inflation, having more fiscal responsibility, more equity financing and more supply reforms geared to increase productivity, as well as taking steps to complete the Banking Union and implement the Capital Market Union. But this move can only be contemplated if sufficient discipline starts reversing the trend of ever-growing economic heterogeneities across Member States.
Ultimately, the paradox of the Euro is that a single currency and national economic policies coexist without a strong cement of coordination. Ultra-accommodating and asymmetric monetary policy have been used to overcome the contradictions of this paradox, but the price of this permanent rescue is costly. It is essential to ensure convergence of fiscal and structural policies.
Extracted from the main Eurofi publications (Regulatory Updates, Views Magazines and Conference Summaries)
Eurofi policy notes
Panel discussion summaries
Eurofi Views Magazine chapters
Markus Ferber - European Parliament | Marek Belka - European Parliament | Ondřej Kovařík - European Parliament | Paul Tang - European Parliament
Rolf Strauch - European Stability Mechanism (ESM) | Mario Nava - European Commission | Reinhard Felke - European Commission | Tibor Tóth - Ministry of Finance, Hungary | Carmine Di Noia - Organisation for Economic Co-operation and Development (OECD) | Didier Borowski - Head of Macro Policy Research - Amundi
Valdis Dombrovskis - European Commission
Axel A. Weber - Center for Financial Studies (CFS) | Alfred Kammer - International Monetary Fund (IMF) | Declan Costello - European Commission | Michala Marcussen - Société Générale | Dino kos - Special Advisor to the Chief Executive Officer, CLS
Elisabeth Svantesson - Minister for Finance, Sweden
V. Dombrovskis - Executive Vice President, European Commission
I. Tinagli - Chair of the Committee on Economic and Monetary Affairs - European Parliament
Villeroy de Galhau - Banque de France | Nadia Calviño - Ministry for Economy and Digitalization, Spain | Klaas Knot - De Nederlandsche Bank & Financial Stability Board | Mário Centeno - Banco de Portugal | Vitorio Grilli - J.P. Morgan | Luigi Federico Signorini - Banca d’Italia
Werner Hoyer - European Investment Bank | Odile Renaud-Basso - European Bank for Reconstruction and Development | Harald Waiglein - Federal Ministry of Finance, Austria | Philippe Heim - La Banque Postale | Alfred Kammer - International Monetary Fund
J. de Larosière - Former President, Eurofi
Klaus Regling - European Stability Mechanism | Andrej Sircelj - Ministry of Finance, Slovenia | Werner Hoyer - European Investment Bank | Pablo Hernández de Cos - Banco de España
Markus Ferber - European Parliament | Declan Costello - European Commission | Boris Vujčić - Croatian National Bank | Mārtiņš Kazāks - Bank of Latvia | Pierre Heilbronn - European Bank for Reconstruction and Development | Laurent Zylberberg - Caisse des Dépôts | Sylvain Broyer - S&P Global Ratings Europe Ltd. | Cyril Roux - Groupama
O. Scholz - Federal Minister of Finance and Vice Chancellor, Germany