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Repere financiare post pandemie în Europa
Post-pandemic financial milestones in Europe

Author(s): Andrei Dobrescu
Subject(s): Law, Constitution, Jurisprudence, Civil Law
Published by: Universul Juridic
Keywords: recovery; price growth; inflation; budget deficit; BEPS; VAT; FTT;

Summary/Abstract: According to all analysts, the recovery of the world economy will continue post Covid-19 pandemic with all the existing obstacles. As for the European Union, its economy will continue to face the twin challenges of controlling inflation and reducing budget support. On inflation, central banks should already have experience in managing inflation and be able to mobilise quickly and flexibly. By contrast, the abandonment of emergency measures adopted by governments to support their economies is a complex and far-reaching undertaking. In addition to this double challenge there are also some risks to the pace of growth. It is primarily about state intervention in the event of new waves of the virus or other major shocks. Under these circumstances, the IMF’s fear is that economic growth in developed countries will stabilise at around 1% at the end of 2022, compared with the 2%-3% level currently forecast. Governments cannot implement tax policy in support of taxpayers because they do not have sufficient resources. However, according to the European Central Bank (ECB), while market interest rates have continued to rise, financing conditions remain generally favourable for businesses, households and the public sector, which is key to continued economic growth and to countering the negative effects of the pandemic on the path of inflation. The ECB expects that favourable financing conditions can also be maintained in the fourth quarter of 2021, admittedly with a slightly lower rate of net asset purchases under the pandemic emergency purchase programme (PEPP) compared to the second and third quarters. The ECB also mentioned some influencing factors, namely the level of key interest rates, indications of their likely future direction (forward guidance), asset purchase programme (APP) purchases, reinvestment policies and long-term financing operations. The ECB says it is ready to adjust all its instruments to ensure that inflation stabilises at its 2% medium-term objective. If they fail, governments risk once again ending up with sluggish growth as after the 2008 global financial crisis.

  • Issue Year: 2021
  • Issue No: 03
  • Page Range: 4-10
  • Page Count: 7
  • Language: Romanian