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25th Jun 2022

Agenda

Economic worries and Hungary on the spot Next WEEK

  • As inflation and energy prices rise, and the war in Ukraine continues, EU agriculture ministers are expected to discuss the affordability of food (Photo: Bernard Hermant)
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The looming stagflation, a toxic mix of high inflation, slow growth and high unemployment, is making economists worried, as it would have not only difficult economic, but also political consequences, in the EU.

On Monday (23 May) EU commissioners Valdis Dombrvoskis and Paolo Gentiloni are expected to set out the commission's assessment of EU's economies and how they will develop in light of Russia's invasion of Ukraine and the fallout from the Covid-19 pandemic.

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The two are also expected to announce an extension of the suspension of EU fiscal rules for another year, which originally expired this year.

On the same day, the eurozone's finance ministers will discuss the issue in the council.

On Tuesday (24 May), EU affairs ministers will meet in Brussels and work on preparing the two upcoming EU summits at the end of May and June.

They are also set to discuss the candidacy status of Ukraine, Georgia and Moldova in preparation for the June summit of EU leaders.

The French EU presidency has also organised a hearing on Hungary, under the Article 7 sanctions procedure, launched in 2018 against Budapest for democratic backsliding.

During the hearing — the fourth in four years — the commission is expected to set out new developments, and the Hungarian government will respond to the assessment. Other member states can ask questions.

The new hearing is unlikely to lead to anywhere in the procedure, which seems stuck in the council, as there is no appetite among EU governments to set out recommendations for Hungary — but they also do not want to drop the procedure, which could send the message that there are no longer democratic concerns with Viktor Orbán's government.

Still on Tuesday, agriculture ministers will discuss food security in light of the war in Ukraine.

Ministers are expected to discuss high food prices, a key worry as energy prices and inflation increases across the bloc.

In the meantime, EU diplomats continue negotiations on the sixth package of sanctions against Russia, which for now has been stuck in a stalemate, with some member states, but particularly Hungary, opposed swiftly cutting Russian oil imports.

Next week will be a short one in Brussels as Belgians celebrate ascension day and most EU officials take a break as well. The parliament also has a "Green Week" when MEPs go back to their constituencies.

Hungary wants EU billions for Russia oil-ban deal

Hungary is continuing to block an EU oil embargo on Russia, but there is optimism its objections can soon be overcome — perhaps within a few days to "a week or two", according to some EU foreign ministers.

EU states warn of looming food-price crisis

Prices of cereals, fertilisers, and oilseed have shot up drastically in several European markets due to Russia's war on Ukraine, prompting some member states to seek EU aid.

Analysis

An inflation surge, but (some) economists warn on raising rates

Rising prices have fuelled the debate among economists about inflation risk - with some arguing that central banks should increase interest rates, while others urge governments and central banks to adopt more precise and targeted measures.

EU leaders talk Ukraine candidacy This WEEK

EU leaders will gather in Brussels and discuss Ukraine's candidacy status, and the impact of Russia's invasion of the country on energy and defence. European Central Bank chief Christine Lagarde will give a briefing to MEPs on inflation to MEPs.

Taxonomy and Ukraine on top This WEEK

MEPs will vote on an objection to the EU Commission's proposal to classify, temporarily, gas and nuclear energy investment as 'green', under the so-called taxonomy. Meanwhile, EU finance ministers are expected to approve Poland's recovery plan.

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