The war that Russia is waging in Ukraine is above all a tragedy for the Ukrainian people. The European Union immediately showed solidarity and provided aid to the refugees. But what does this conflict mean for the European economy as food and energy prices rise and Member States are taking urgent steps to escape their dependence on Russian gas?
That is the central question that will be discussed at the Economic Forum in Brussels on 17 May. At this EU’s leading economic event, policy makers, academics, civil society representatives and business leaders discuss the major economic challenges facing European countries. This meeting has been held for more than twenty years.
‘We need to help and invest in households’ according to IMF number 2
Number 2 of the International Monetary Fund in Washington, Gita Gopinath, is one of the many renowned speakers who will participate in the Forum. We asked her about the extent of the economic consequences of the war for European countries.
“The war in Ukraine will have a significant effect on almost all of Europe: we have lowered our growth forecast for the main European economies this year from about 1% to 3%,” she points out. †At the same time, we expect inflation to be significantly higher,” she continues. “The most direct effect we see on people’s lives – apart of course from what is happening in Ukraine and the refugee crisis – is the fact that the price of raw materials has risen and the price of energy has taken a substantial jump: this affects purchasing power of consumers; moreover, the effects of the war and the sanctions have not yet been fully felt at this stage”, she believes.
We ask him what measures the European Union should take to ensure a strong economic recovery, especially for young people. †The pandemic is particularly hard on young people and today there is war and the great uncertainty that comes with it and it affects confidence: which affects the way companies hire and you can see it also affects young people who are just starting out. entered the labor market”, replies Gita Gopinath.
“About What to Do,” she adds, “We think it is appropriate to provide targeted support in the form of, for example, financial aid to households that have been severely affected by this increase in energy prices. It’s also important to invest.” she says. “We need to make the green transition happen while taking into account energy security; a climate investment fund would also be very helpful,” she says.
A childhood between fear and hope
2022 is the European Year of Youth and a question arises: what does the future look like for the next generation? To find out, we turned to young economists and politicians who will be present at the Brussels Economic Forum.
In the European Parliament, we interviewed Kira Marie Peter-Hansen, a young Dane, elected to the European Parliament three years ago, about her vision for the future. “I fear that we are not meeting the climate goals and that we have a bloc in Eastern Europe that is going backwards in terms of democracy and human rights,” he said. she indicates. “I also fear that we face challenges in our democracy and that we will be caught up in another cold war.” she adds.
“But at the same time I am very optimistic and I think we can handle all these crises and when I see the younger generation I am filled with hope,” she assures.
Generations of crises
Every generation has its share of challenges, but for those called Z and Alpha, they are colossal: financial and economic crises in 2008, Covid-19 pandemic, climate and environmental crisis, crisis of democracy, war in Ukraine and technological and digital revolution that will turn their world upside down.
Roxana Mihet is assistant professor of finance in conditional tenure at the Faculty of Business at the University of Lausanne. †Our future will depend on the policies we adopt today to balance the pros and cons of digital transformation.” she believes. “I think governments around the world need to be very careful in determining how and when to regulate these technologies because too little regulation will harm people, but too much regulation could harm them and harm economic growth,” she points out.
Individual behavior and policy change
Participating in the dual environmental and digital transition is therefore vital for a generation born with a smartphone in their hands. But how do you ensure that the associated upheavals do not increase social inequality?
“Everyone can play a role in changing their behavior, but of course there’s not much you can do,” in turn points to Diego Känzig, who is applying for a PhD in economics from London Business School. “I believe that it is up to politicians to create a framework that allows us to reduce CO2 emissions and encourage the behavioral changes we need to meet the climate challenge and the European Union is doing a lot in this regard.” he believes.
Between the climate crisis, robotization and the questioning of democracy, the world is changing at breakneck speed. The future generation will undertake, work and consume very differently from the previous one, both by adapting to this new world, but also by forging it in its image .
Which European strategy?
What savings will we pass on to the next generation? And what needs to be done now to ensure its sturdiness? We put these questions to the Executive Vice-President and European Commissioner for Trade, Valdis Dombrovskis.
“First of all, of course, it is important to work towards ending the war in Ukraine, I think that is a goal that we should pursue as such,” he insists. †It is also clear that the sooner we end the war, the better the economy will recover.” he makes clear.
“It is important that we strengthen the resilience of the European economy and that Member States make good use of the financing available under the Recovery and Resilience Facility, and it is clear that we need to reduce our dependence on Russian fossil fuels. fuels,” he said.
As for MEP Kira Marie Peter-Hansen’s fears, like the concerns of some of Europe’s youth, about our ability to achieve climate goals, here’s her view: “It is clear that we must continue to stay on track with our climate goals: to reduce our emissions by 55% by 2030 and be climate neutral by 2050,” says the EU Trade Commissioner. “I would say that accelerating our move away from Russian fossil fuels does not contradict that, because that is exactly the aim of the European Green Deal,” he remembers.