The meeting took place in the context of the Macroeconomic Dialogue – the biannual forum for information exchange and discussion between the European Central Bank, the European Council, the European Commission and the European social partners (ETUC, CEEP, BUSINESSEUROPE, UEAPME).

Given the strong impact of the crisis on the manufacturing sector, but also external factors such as the US Inflation Reduction Act, industriAll Europe’s General Secretary, Luc Triangle, was invited to present his views.

The meeting focused on the current economic conditions, outlook and policy responses, as well as trends and challenges related to EU productivity and competitiveness.

Unions stressed that there is now mounting evidence and proof that inflation is not driven by wages but increasingly by profits*. Profit margins are growing much faster than inflation, with historically high profits recorded in 2022. With windfall profits, we need windfall taxes! Trade unions complained that investment levels, twice as low as in 2000, were too low to sustain productivity growth. They argued that fiscal rules should leave sufficient room for manoeuvre to finance the twin transition. A return to austerity would be disastrous for both people and the economy.

Luc Triangle focused on the Green Deal Industrial Plan, pointing out that the EU’s response to the US anti-inflation bill lags behind the US both in terms of subsidies and the social dimension. He insisted that the EU needs massive investment in green technologies. But national or European support should not be unconditional. The Green Deal Industrial Plan must be conditional to ensure that recipients offer quality jobs, respect collective bargaining and access to training, but also that they do not pay out extraordinary dividends. A European investment plan is also needed to avoid widening regional inequalities. Luc Triangle reiterated that we must learn the lessons of the past and avoid the path of austerity.

Discussions in the Macroeconomic Dialogue are informal, confidential and non-binding. No formal conclusions are drawn after the meetings, short statements by key actors are published in a press release. Nevertheless, they provide an opportunity for an exchange of views between social partners and policy makers, and as such are an expression of the European social model.

*A recent ECB seminar showed that inflation in the euro area from early 2021 to summer 2022 was driven twice as much by profits as by wages.

MEDPOL press release: EN

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