The war forces the EU to maintain fiscal stimuli in 2022. Nadia Calviño warns! The First Vice President and Minister for Economic Affairs and Digital Transformation, Nadia Calviño, pointed out this Monday that Spain is one of the EU countries least exposed to the economic impact of the war in Ukraine and pointed out that it is too early to do an estimate of its macroeconomic repercussions.
Spain is one of the EU countries least exposed to the economic impact of the war in Ukraine. Calviño
“What all the organizations agree on is that Spain is one of the countries least exposed to Ukraine’s aggression and therefore it is one of the countries for which the least economic impact is expected,” Calviño told the media before its entry to the Eurogroup and after the Organization for Economic Cooperation and Development (OECD) has indicated this Monday that the exposure of the Spanish economy to the direct impact of the crisis caused by the Russian invasion of Ukraine “is limited”.
Calviño has acknowledged that Russia’s military offensive on Ukraine “is already having an impact” in terms of the rise in prices of energy and other raw materials as well as the disruption in supply chains that are important for the agri-food sector.
“We are acting both at a national and European level to try to minimize the impact in terms of growth and inflation”, highlighted the Minister for Economic Affairs, who has defended a coordinated and joint response at European level in the political-financial field, minimizing the impact on the scarcity of raw materials and other essential industrial products.
On the possibility of a recession in the Eurozone, Calviño has referred to the previous analyzes of the Eurogroup and the European Central Bank that although they expect a slowdown in the economic recovery but not that it derails.
Regarding the fiscal response to the situation arising from the war in Ukraine, Calviño has indicated that Spain will defend a “coordinated” and “European” response because it is a challenge that “transfers national borders and requires joint and united action” .
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The head of Economy has held meetings this Monday with the Commissioner for Economy, Paolo Gentiloni; with the economic vice-president of the European Commission, Valdis Dombrovskis; and with the Commissioner for Employment and Social Rights, Nicolas Schmit. The Community Responsible for Employment has also received the Minister of Inclusion, Social Security and Migration, José Luis Escrivá.
“Of course, we have spoken about the prospects for the deployment of the Recovery Plan. Everyone has expressed a very favorable opinion of the labor reform and the social dialogue process that we have in our country,” Calviño indicated regarding the meetings.
The approval of the labor reform is one of the milestones that Spain must meet to unlock the next tranche of the Recovery Fund, endowed with 12,000 million euros.
The Eurogroup urges the countries with the highest deficit to reduce their debt, but without compromising their economic growth
The Eurogroup meeting served this Monday to take stock of the damage caused by the Russian invasion of Ukraine and the sanctions on the European economy. Although it is still early to assess the impact of the conflict, the Eurozone is already beginning to feel the first effects: an increase in the price of energy, bottlenecks in the supply of raw materials... All of this has led the Eurogroup to reassess its fiscal policies and maintain the stimulus for this year. "We must go towards neutrality in 2023, but it will depend on the evolution of the war," said the Commissioner for the Economy, Paolo Gentiloni.
The conflict led the European Central Bank last week to revise down its growth forecasts from 4.2% to 3.7% in 2022. The Eurogroup does not yet dare to make an estimate, but highlights that its calculation that the economy was going to expand by 4% this year in the Eurozone is now "too optimistic". Europe is facing this crisis "in good shape, with a strong recovery after the pandemic," said the president of the Eurogroup, Paschal Donohoe.
What is clear is that the impact will be uneven across member states. Spain, as one of the countries that depends the least on Russian gas, "is less exposed," recognized the second vice president and Spanish Minister of Economy, Nadia Calviño. But the country will not emerge unscathed from the inflationary spiral resulting from the crisis, which is already driving up the price of energy, and from the bottlenecks in the supply of agri-food products.
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