The European Union is facing an economic conundrum after a severe and abrupt recession caused by the Covid-19 pandemic and the Russian invasion of Ukraine. While the Next Generation EU calls for an ambitious investment plan, most EU member states face record levels of public debt, and the rise of inflation may trigger a new financial crisis that would destabilize sovereign debt markets.
Meanwhile, problems such as climate change and an ageing population, which are much older and structural, still demand a joint response that may promote sustained and inclusive growth and, hopefully, protect democracy from the allure of populism.
The main goal of the conference «A very European Puzzle: balancing budgets and promoting growth» is to generate a public discussion about the urgent revision of the EU fiscal rules which finance its budget and the strategy that it must put forward to foster sustainable economic growth in a changing world of American protectionism and growing geopolitical tensions between China and the West.
The event will take place at Ace Events, Av. d'Auderghem 22, on May 31st, between 1pm and 5:30pm.
POLITICO's Spotlight Event
How can Europe go from budgetary Wild West to a new fiscal order?
Most countries have reached record levels of public debt to sustain their economies during Covid and the energy crisis following Russia’s invasion of Ukraine. This high level of spending risks fueling inflation, and the European Commission is seeking a return of fiscal discipline. But fiscal rules have to be adapted to the new reality.
Questions to be addressed include:
- Is fiscal policy out of control and how to rein in back in?
- How to manage the tensions between demand for support from businesses and households with the need to keep debt in check?
- The Commission asked member states to curb spending. Are they overheating the European economy? What fiscal policies should be going forward given current European Central Banking measures to respond to rising inflation?
- If there is no deal before the mandate, what happens then? Is there enough political pressure to reach one?
- What are the virtues and limitations of the Commission’s proposed new fiscal rules? What will be the key battle lines?
How can industrial policy promote growth in times of geopolitical turmoil?
The EU economy today must facilitate a climate transition while adjusting to the new trade reality of a sanctioned Russia, a protectionist USA, and a changing China. Against this background, sustained and inclusive growth is urgently needed to recover from the pandemic recession and stop the rise of populism. This panel will discuss the growth prospects for the EU, the risks of a financial crisis, and the role that industrial policy may play.
Questions to be addressed include:
- What role can industrial policy play in driving sustainable and inclusive growth in the EU?
- What measures can the EU take to protect its citizens given rising inflation and interest rates?
- The collapse of Silicon Valley Bank has raised fears of a financial crisis. Is Europe at risk? What role can banking regulation play and does it complement or conflict with industrial policy?
- How have recent changes in the global trade environment, such as sanctions against Russia, a protectionist US and a changing China, impacted the EU economy? Can it maintain its competitiveness?
- How can the EU continue to encourage international cooperation on climate and trade issues, despite the challenges posed by global power dynamics and geopolitical tensions?
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