Additional considerations on the Euro area economic policy 2023

Background

In 2023, the euro area, consisting of 20 of the 27 EU member states, grappled with economic challenges, such as high inflation, the economic and social impacts of the Russia-Ukraine conflict, especially on energy prices, and economic uncertainty. The European Central Bank (ECB) played a pivotal role in managing monetary policy to ensure price stability. In this context, the European Economic and Social Committee (EESC)'s ECO section has produced an opinion stressing the need for coordinated fiscal and monetary policies to tackle inflation and ensure stability. The opinion is slated for adoption by the whole organisation during the EESC's October 2023 plenary session. 

Key points

In the opinion, the EESC

• advises the ECB to keep adapting its policies to reach a stable 2% inflation target without overtightening. The EESC also suggests using measures other than changing interest rates to lower inflation and stresses the importance of lowering interest rates as soon as possible;
• backs aligning Member States' fiscal policies with ECB's to manage inflation coherently, highlighting the need for tailored fiscal policy measures due to varying public finances. The EESC emphasizes the importance of targeted fiscal aid for vulnerable groups and firms, alongside supporting research, development, and innovation to boost productivity and maintain competitiveness;
• recommends social partners and governments collaborate on income pacts to lower inflation and support investment and growth, particularly for vulnerable groups. The EESC stresses the ongoing significance of efficient implementation of the Recovery and Resilience Facility (RRF) and call for rigorous evaluations of funded projects to ensure long-term recovery and resilience;

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Additional information 

- EESC section: Economic and Monetary Union and Economic and Social Cohesion (ECO)
- opinion type: Own-initiative Opinion
- rapporteur: Manthos MAVROMMATIS (Employers - GR I / Cyprus)
- reference: ECO/619-EESC-2023
- referral: N/A
- date of adoption by section: 5/10/2023
- date of adoption in plenary: 25-26/10/2023

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