CoR Plenary (April 2022)

The Commission has published a report summarising the results of the online public survey on the future of the EU’s economic governance framework. The survey is an important element of the wider debate on the EU’s economic governance framework which was relaunched in October 2021.

The IMK advocates a reform focused on appropriate fiscal rules that promote short-term macroeconomic stabilisation and the long-term modernisation of the public capital stock, while still keeping the sustainability of public debt in mind. They propose an expenditure rule for non cyclical, non-investment expenditure coupled with a Golden Rule for public investment. As a pragmatic solution, the permissible debt-to-GDP ratio should be increased to 90%, while escape clauses should apply during times of crisis. The proposed rules should replace the EU’s current fiscal rules. The Macroeconomic Imbalance Procedure should also be reformed at the same time. As a key part of such a reform, we advocate the establishment of a Macroeconomic Dialogue in order to ensure compliance with the reformed rules and consistency of the national strategies.

This article studies how the Macroeconomic Imbalance Procedure (MIP) is reconfiguring social and economic policy-making in the European Union (EU). The MIP was meant to tackle competitiveness-based imbalances but today addresses a broader range of social concerns. Scholars agree this fits in a trend of depoliticizing governance through tools of performance management. But they disagree whether this marks the ‘socialisation’ or ‘neoliberalization’ of governance. The authors contribute to this debate by drawing attention to the politics of performance management in the context of neoliberal European integration. They argue performance management has been driven by two tensions: i) macroeconomic divergence and intergovernmental dissensus and ii) EU institutions’ contradictory technical responsibilities and political ambitions. They conclude that the expansion of social indicators in the MIP has undermined the coherence of ‘neoliberal’ regulation. However, its connection with a project of the European Commission’s empowerment means it is unlikely to improve prospects for greater social protection.

Offering an overview of the economic and budgetary situation in the EU and beyond, and summarising the main economic indicators in the EU and euro area and their two-year trends, this study is the sixth in an annual series of 'Outlooks' produced by the European Parliamentary Research Service (EPRS). In seven chapters, the authors of the publication explain and analyse the EU annual budget and give an overview of its headings for 2022, all within the wider budgetary context of the EU’s post-2020 Multiannual Financial Framework (MFF) and the Next Generation EU (NGEU) recovery fund. This year's special 'economic focus' puts the spotlight on some aspects of the ongoing economic recovery– namely, fiscal and monetary matters, labour issues and environmental choices – and aims to give a flavour of the discussion expected in the coming months.

The coronavirus crisis has underlined the need for the European Union to devote greater efforts to anticipatory governance, and to attempt to strengthen its resilience in the face of risks from both foreseeable and unforeseeable events. This paper builds further on an initial 'mapping' in mid-2020 of some 66 potential structural risks which could confront Europe over the coming decade, and a second paper last autumn which looked at the EU's capabilities to address 33 of those risks assessed as being more significant or likely, and at the various gaps in policy and instruments at the Union's disposal. Delving deeper in 25 specific areas, this new paper identifies priorities for building greater resilience within the Union system, drawing on the European Parliament's own resolutions and proposals made by other EU institutions, as well as by outside experts and stakeholders. In the process, it highlights some of the key constraints that will need to be addressed if strengthened resilience is to be achieved, as well as the opportunities that follow from such an approach.

Policy-makers are seeking to 'future proof' policies in order to be better prepared for disruptive and unanticipated events. The application of foresight methods such as stress-testing can help achieve this goal. This study introduces a methodology for the European Parliament to stress-test legislation. The method can be integrated into existing law-making and scrutiny processes in the European Parliament. It draws on lessons learnt and recommendations stemming from independent research that encompassed a comprehensive review of reports and research studies, and in-depth research on four countries (Finland, the Netherlands, New Zealand and the United Kingdom), as well as a pilot-test for three policy areas (robotics and artificial intelligence, information and consultation of workers, and competition policy – State aid).

Understanding inflation dynamics requires an understanding of the underlying concept and how it is measured. Inflation is defined as a process of continuously rising prices and falling purchasing power. In other words, a general and broad-based increase in the price of goods and services over an extended period. The main objective of central banks is to keep prices stable, to preserve the integrity and purchasing power of people's money. The most common inflation indicator measures the average change in the price of a basket of consumer goods and services over time. The closest approximation of what people intuitively understand by the term inflation is the change in their cost of living. The Harmonised Indicator for Consumer Prices (HICP), against which the European Central Bank (ECB) assesses the achievement of its price stability objective, is based on this concept. Highlighting the principles of optionality, gradualism and flexibility in a recent speech, ECB President Christine Lagarde reflected upon the current uncertainty. After several years of inflation rates significantly below the inflation target, the ECB is now facing consumer price increases not seen since the launch of the euro. In February 2022, inflation rates hit an annual rate of 5.9 % in the euro area and 6.2 % in the EU. The Russian war on Ukraine is now likely to cause inflation to increase further, with underlying price pressure broadening and lingering supply-side bottlenecks.