Euro area economic policy 2022

Key points:

The EESC

• calls for the implementation of practical and effective policies on the road to the complex, though necessary transformation of the whole of society;

• emphasises the need for a revision of fiscal rules of the legislative framework focused on its simplification and monitoring is a clear requirement;

• notes that the COVID-19 pandemic struck as most countries were undergoing a process of correction of  macroeconomic imbalances and the pandemic interrupted the reduction in debt-to-GDP ratios, while housing prices accelerated, suggesting an overall aggravation of macroeconomic conditions;

• refers to the large external imbalances manifested in the Eurosystem – TARGET2, creating the largest differences between countries since their development;

• is monitoring the rapid increase in inflation since the start of 2021, mainly linked to the strong rebound in energy prices from historic lows during the pandemic, disruption of supply chains and increased transport costs and expects price growth to moderate in 2022 and 2023, with inflation levels declining to past average;

• calls for further progress in the completion of the Capital Markets Union;

• is following the growing divergence between Member States, but also within the EU and euro area countries and supports the adoption of a combination of economic policies that make effective use of available domestic resources to reignite the convergence process;

• points out the need to develop appropriate indicators to monitor inequality and poverty;

• calls for urgent measures to be taken and implemented to fight climate change, including the development of basic indicators to measure the socio-economic consequences of the crisis;

• stresses that the negative impacts of the climate crisis will have a big impact on macroeconomic, financial and social stability;

• welcomes the ECB's and Commission's decision to open discussions on the introduction of the digital euro;

• points out the adverse developments in the insolvency of small and medium-sized enterprises that could be disruptive to stability in the financial sector, mainly the banking industry and calls the introduction of necessary measures to safeguard the stability of the financial system;

• stresses the need to prepare for potential other viral crises and to create the conditions for reducing healthcare expenditure caused by the spread of disease while ensuring better conditions for the health of all workers involved in creating value in society.