Gentiloni and the general picture of the world economy

Gentiloni and the general picture of the world economy

Hutchins Center on Fiscal & Monetary Policy Polo Gentiloni, Economic Commissioner for the European Union, Center for the United States and Europe, “The Next Generation for Atlantics?” A Conversation on Economics and Geopolitics on October 14. “The conversation was moderated by Brookings scholars Gian Maria Milesi-Ferretti and Thomas Wright and moderated by David Wessel.” This post summarizes the conversation focused on economic challenges, as well as Atlantic maritime issues and foreign policy.

Gentiloni underscored the speed and scale of the political response to the Covid crisis at the EU level: the suspension of the European Central Bank’s operations, the stability and growth pact’s restrictions allowed national governments to adopt a strong economic response to the crisis, and the subsequent fiscal consolidation program of the European Union. The joint response to the vaccine acquisition, after a difficult start, has now helped to ensure that 75% of EU citizens are vaccinated. This allowed the business to reopen and maintained a strong financial recovery. The IMF predicts real EU growth of 5% this year.

Given the dangers and uncertainties associated with the evolution of the epidemic, supply chain disruptions, soaring prices and the sharp rise in public debt, the EU’s challenge is not only to find ways to recover lost land, but to achieve more sustainable and sustainable growth, he said. Spending on public investment is an important tool to support the greening of the economy and its digitization, as well as reforms implemented by national governments in their recovery plans.

Gentiloni ressed the importance of the recent agreement on international taxation and the signing of some 27 EU member states, such as Ireland, which made the decision to adopt a 15 per cent minimum tax rate corporation tax difficult. Along with the other pillars of the International Tax Agreement – the redistribution of tax rights based on profit making – this was a turning point. The European Union has pledged to implement it by 2023. Treasury Secretary Janet Yellen pointed out that the long – negotiated agreement reflects a change of government in the United States.

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In geopolitics, Gentiloni highlighted the welcome of the new Biden regime to multinationalism. The difficulties in the AUKUS developments, especially the withdrawal of troops from Afghanistan, have strengthened the awareness of the need to try to play a more important geographical role in the European Union, he said. It is important in critical areas of Europe, including the Mediterranean, North Africa and the Balkans, and is good for NATO and the US-EU partnership. The EU faces a challenge in achieving these goals: for example, progress in the European defense is very limited. At the same time, the United States is on the same page about the need to meet China’s challenge, and is strongly committed to NATO, which plays a crucial role for Russia.

As for China, Gentiloni said the European Union is fully aware of the challenge posed by a dictatorial model that does not integrate economic success with democracy as we know it. Europe also faces this challenge in some aspects of its political context. It seeks to support an open economy and open trade and to avoid the adverse economic consequences of severing or closing these international economic ties. This dual track is challenging, obviously not easy, and exemplifies the difficulties faced by supply chains in times of crisis and the need to maintain European autonomy in certain strategic supply chains without disrupting international trade relations. The European Union (EU) recognizes the need to strengthen political ties with China and Russia in order to open the door to trade and investment.

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Regarding Brexit, Gentiloni said the problems should not be exaggerated. The so-called Northern Ireland Protocol, which was based on a UK proposal approved by the Commission, was very difficult. Sure, things can be made more flexible, but this protocol cannot be attacked or repealed without dangerous political repercussions, more so in Ireland than in the European Union, which is not the right thing to do.

Regarding the availability of Kovid vaccines, at least for developed countries, the problem with the export approval of 800 million doses from the European Union is that these doses do not reach primarily low-income countries, where effort is needed, Gentiloni said. The next G20 in Rome at the end of October will be a turning point and will increase the commitment of the various developed economies. Rich countries should be more desirable and can do this. The problem is very important: no one is safe until everyone is safe, and the cost is not so high. This is not only a matter of solidarity, but also of the well-being of the developed economy. In front of Kovid, it is also important to loosen the travel rules. The so-called Green Certificate of the European Union was a great success, allowing travel and access to indoor activities across Europe using the same QR code. This is a great way to increase and facilitate trade and travel and extend it to developing countries.

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