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Stagflation in Europe: challenges and way forward for monetary and fiscal policies

Day 1 Morning

Wednesday 26 April

Room :



Rolf Strauch
Chief Economist and Member of the Management Board - European Stability Mechanism
Public Authorities
Declan Costello
Deputy Director-General, Coordination of Economic Policies of Member States - DG for Economic and Financial Affairs, European Commission
Alfred Kammer
Director, European Department - International Monetary Fund
Johan Van Overtveldt
Chair & MEP - Committee on Economic and Monetary Affairs, European Parliament
Industry Representative
Michala Marcussen
Chief Economist of the Group - Société Générale
Other stakeholder & expert
Jacques de Larosière
Honorary President - Eurofi


Europe has entered a period of stagflation: Inflation remains persistent and high, well above the 2% target. In February 2023, the euro area headline harmonized index of consumer prices (HICP) stood at 8.5 per cent. Growth prospects in Europe for 2023 are weak (0,8% according to the winter forecast of the EU Commission). 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.

This opening session will assess the right policy mix – monetary-fiscal interaction – for coping with persistent high inflation and the reduction of growth in Europe. The panel will first discuss the steps the ECB should take to ensure price stability and financial stability. Then the panel will focus on how sound fiscal policy can contribute to rein in inflation and promote growth in the EU through productive investment.

Points of discussion

  1. What steps should the ECB take to address persistent and high inflation? Can these measures contribute to improving economic growth prospects in Europe?
  2. How to avoid or address possible conflict with fiscal and monetary policies that pull in opposite directions? To what extent is fiscal policy effective in supporting troubled households and firms while containing inflation? What are the right priorities – notably in highly indebted countries – for fiscal policies to boost productive investment and growth while supporting the most vulnerable households and firms?