Ekonomické zprávy
08.11.2021

EU ministers to discuss inflation surge

Reuters reports that on Monday European Union finance ministers will  discuss a surge in consumer prices, its impact on wages and changes they would like made to the bloc's budget rules to support investment and reduce debt.

"We always expected inflation numbers to pick up this year, but this has been faster than expected and we see levels we have not seen for a long time," a senior EU official involved in the meeting said. "The 4.1% should generate a discussion."

The October surge was mainly driven by a 23.5% jump in energy prices, which would eventually fall again, though probably not to the levels before the COVID-19 pandemic, the official said.

"We should come back to more benign inflation numbers, but the process will be slower than expected and the risk of second-round effects in wage formation is clearly something that needs to be taken seriously and monitored," the official said.

The ministers will also start talks on a planned reform of the EU's budget rules to adjust them to post-pandemic economic realities of high public debt and large investment needs to fight climate change and support growth.

The rules require annual public debt reduction rates that are too ambitious for most EU countries. The fiscal framework, which aims to keep budget deficits below 3% of GDP and debt below 60% to safeguard the euro's value, also provides little explicit support for government investment.

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