Lhe Russian war against Ukraine will inevitably lead to a severe economic shock of uncertain magnitude in the European Union (EU). Rapidly rising food and energy prices are hitting the most vulnerable Europeans, deepening energy poverty and worsening living conditions.
The economic forecasts presented by the European Commission clearly illustrate the negative impact of the war on our economy – growth is slowing considerably and inflation is reaching levels not seen since the introduction of the single currency.
strong and united
This bleak picture demands immediate action. We Socialists and Democrats, who have long fought for a fairer Europe, are determined to take the lead in efforts to protect European citizens, especially the most vulnerable, from the shock waves of war.
We owe it to the Ukrainians. If we don’t stay strong and united, we won’t be able to help them. We owe it to our citizens, because we promised them to defend our values. The lack of a European response to the recent financial and migration crises has taught us a painful lesson: only populists and destructive forces profit from EU inaction.
So far, the Commission has chosen to talk about sanctions and the reconstruction of Ukraine. These are very important priorities, but in order to retain the support of Europeans, to carry out these priorities and to prevent the rise of populism, we must also protect citizens from the repercussions of war; this is the meaning of the resolution of the European Parliament adopted in May, with several concrete objectives and ideas. We call on the European Commission and EU Member States to take them into account immediately and to make them a clear priority.
Extended General Safeguard Clause
The first thing to do is to retain maximum flexibility in European fiscal rules for as long as necessary to allow an effective response to changing economic conditions. This is possible thanks to the “general safeguard clause”, which makes it possible to temporarily derogate from European budgetary rules in the event of a major economic recession.
The EU introduced this clause with the 2011 budget reform in response to the financial crisis, but only activated it in March 2020 to enable governments to react to the Covid-19 pandemic.
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