The president of the Eurogroup warns of the impact of inflation on the "medium-term" economic outlook

BRUSSELS, June 24 (EUROPA PRESS) -

The president of the Eurogroup, Paschal Donohoe, warned this Friday that if inflation becomes part of the economic outlook "in the medium term, it will be bad" and it will be "difficult" to maintain living standards due to rising costs.

This was stated in a speech to the press at his entrance to the Summit of Heads of State and Government of the EU, in which Donohoe indicated that "central banks in the world and in Europe take measures to prevent that pass" and has exposed the need to implement measures "to prevent this pressure from becoming part of our medium-term prospects" and "remaining embedded in our economy".

In this regard, the president of the Eurogroup has expressed confidence that a "consensus" will be achieved on the budgetary policies for the euro zone and "we will implement the necessary measures to show the strength of the euro zone and the euro", he said .

Within the framework of the meeting in which the leaders of the European Union will address the risks of rising inflation for the economic prospects of the community market as well as the measures to avoid its negative impact, Donohoe pointed out that if inflation becomes a "real part" of the economy in the coming years, the challenges for central banks and governments will be more complex. He has also stressed that "history shows" that if inflation becomes a "multi-annual" phenomenon it will have real repercussions for the cost of living for citizens.

In this sense, the Swedish Prime Minister, Magdalena Andersson, has warned that although "injecting more money into the pockets of citizens" seems "the easiest solution" in a context of inflation such as the current one, it would only increase it. "It is something that we have to discuss and also be honest with the citizens that doing so would not solve the problem," she added.

The prime minister of Latvia, Arturs Karins Krisjanis, has emphasized that "inflationary pressure is caused by the Russian war in Ukraine" and has argued that the best way to lower energy prices is for the conflict to end, if has well recognized that this probably won't happen any time soon.

In addition, asked if Europe is headed for a recession, he stressed that "Ukrainians are now paying with their lives while Europeans are paying with their wallets, so it is difficult to compare."

The president of the Eurogroup has recalled that the economic perspectives plan that the economy of the Eurozone will grow this year and has pointed out the risks of inflation and the price of energy for next year, for which he has urged the governments of Member States to implement measures to alleviate this situation.

The Prime Minister of Slovakia, Eduard Heger, has warned that "we have to realize that inflation will be with us for a long time, so it is important to find solutions at the national level."

In this sense, the Slovak prime minister has appealed to "think about the sustainability of public finances" and has focused on the fact that the COVID Recovery and Resilience Mechanism "costs a lot of money", for which he has defended "thinking twice times what we do now".

Heger recalled that Slovakia has agreed with nuclear power producers to guarantee a price level for 2023 and 2024, although he has stressed that it is not about putting a cap on the price of electricity, the measure will help maintain prices lower for consumers.

For his part, the Belgian Prime Minister, Alexander de Croo, has warned that Europeans could face "a difficult winter" and therefore has opted to face it "united". Acting in a dispersed way, he has warned, "we are not going to achieve it and we are all going to suffer the negative effects".

In this sense, he has been in favor of making joint purchases, establishing a ceiling on gas prices and "better coordination".

For his part, the Prime Minister of Croatia, Zoran Milanovic, has expressed his satisfaction that the Twenty-seven support the country's accession to the single currency, becoming the twentieth member of the eurozone, which will be a "strong" signal for the country and its economy.