Macroeconomic Dialogue – EU economy entering difficult phase

“Higher global prices for energy, raw materials and food are all driving EU inflation and putting pressure on businesses and households alike. As a net importer of energy, we cannot escape the fact that higher global energy prices will tend to lower real incomes in the EU. In this context, social partners need to engage responsibly in collective bargaining on wages and help ensure that temporary price rises do not give rise to rising inflation expectations and in turn a damaging wage-price spiral, that would risk weakening medium-term growth and employment prospects.” This was the key message from BusinessEurope Director General Markus J. Beyrer at the Macroeconomic Dialogue which drew together social partners and European institutions. The President of the European Central Bank Christine Lagarde, President of the Eurogroup Paschal Donohoe and the European Commission Executive Vice-President Valdis Dombrovskis also participated in the exchange about developments and challenges facing the European economy. Beyrer noted that in exceptional times, it is necessary to suspend the rules of the Stability and Growth Pact. At the same time it will be important not to unduly delay the strengthening of public finances. The current situation also reinforces the importance of making best use of the EU's Recovery and Resilience facility to drive productive investment and reform, he stressed.