Additional considerations on the Euro area economic policy 2022

Key points

The EESC:

• notes that the current high level of economic, geo-economic and political uncertainty in the euro area and the European Union, stemming from two ongoing systemic shocks: the continued prevalence of COVID-19 and Russia's invasion of Ukraine;
• reiterates that all substantive and systemic measures should be taken to tackle the ongoing pandemic, while it stresses that the high return on investment in the health sector;
• supports an end to the Russian aggression and the war in Ukraine and the restoration of Ukraine's territorial integrity as this can create the conditions for resilient, inclusive and sustainable economic growth in the eurozone countries and in the Member States of the European Union;
• recommends that the ECB conduct an adequate proportionality assessment, carefully analysing the side-effects of a tightened monetary policy and its consequences for long-term price stability targets. The ECB should proceed cautiously in normalising monetary policy;
• recommends that, in view of sharply rising energy and food prices, national economic policy-makers set up a functioning and effective social safety net for the most vulnerable population groups, including the most affected segments of the middle class, leaving no-one behind;
• recommends that steps be taken towards medium-term fiscal consolidation. With a view to replenishing national budgets, the EESC sees scope for equitable taxation and with it the effective use of public funds;
• calls for concrete steps to be taken to reform the Stability and Growth Pact;
• calls for the completion of the Banking Union and the Capital Markets Union;
• welcomes the ECB's announcement of 15 June 2022 on the preparation of measures to tackle fragmentation in the euro area;
• supports the transformation of the euro area economies and recommends a shift to renewable energy sources and the use of financial resources available under the recovery plan as well as other financial resources, including the support of private sector financing;
• calls on all countries and competent international institutions to work together to address all historically unprecedented systemic shocks, risks and threats that the world is currently facing. Delaying the adoption and implementation of measures may have far-reaching consequences, not only in terms of material loss, but also – and above all – in terms of human life.