Committee on Economic and Monetary Affairs

Money, money, money: With the ECB recently increasing interest rates to counter inflation, many Europeans are seeing their savings dwindle while the threat of stagflation looms large over the Eurozone. What steps can the EU take to ensure economic growth and combat inflation while protecting European consumers?

Submitted by: Ebe Lubecht (NL), Kik Maassen (NL), Madelief van Poelvoorde (NL), Mirte van der Worp (NL), Laura Simón (Chairperson, ES) 

The European Youth Parliament,

  1. Noting how inflation causes  financial hardship for citizens of the EU, 
  2. Taking into account that current market tendencies are leading to a wage-price spiral1,
  3. Concerned about the decreasing availability of loans for consumers in the EU caused by potentially rising interest rates,
  4. Aware that the European Central Bank (ECB) has been consistently raising interest rates2,
  5. Fully alarmed by the rise of Member States’ national debts,
  6. Recognising the burden that low employment rates inflict on Member States’ economies; 
  1. Calls  upon the European Commission to introduce  a fund for the European Food Banks Federation; 
  2. Urges the Member States to set a price cap for necessity goods;
  3. Further urges Member States to compensate industries’ rising cost of production;
  4. Suggests Member States to introduce a luxury goods tax to finance the costs emerging from OC 2 and OC 3;
  5. Authorises the European Commission to demand  businesses to justify the rise of product prices based on the respective increase in production costs;
  6. Ask the Member States to increase understanding of household finances and economics through:  
    • their national secondary education curricula,
    • additional courses for adults;
  7. Encourages Member States to increase corporate income tax for large corporations;
  8. Seeks the European Commission to start a second temporary support to mitigate unemployment risks in an emergency focussed on countering inflation-inflicted hardship.
  1.  Wage-price spiral: Rising prices increase demand for higher wages which leads to higher production costs and further upward pressure on prices. This creates a conceptual spiral.
  2.  Interest rates : Interest rates indicate the cost for banks borrowing money at the ECB.