Debate: EU initiatives to address the rising cost of living, including the implementation of the European Pillar of Social Rights
Date: TUESDAY, 5 JULY 2022
Speaker: Nicolas Schmit
Language: EN

When we are talking about the causes, I’m a bit surprised. Because first it seems that we have forgotten that before the war there was a pandemic. And this pandemic has already pushed prices high because a lot of value chains have been interrupted. When you talk to some industries, they cannot get the material they need. So there is a price hike which is due to the pandemic.  The second one is that we are moving into something which is quite close to a war economy. And we should call it like that, that the situation is not a normal situation which can be easily resolved. And we know where the responsibility lies. The responsibility first lies there where the war has started, where the decision to aggress an independent country has started and was taken. And I think that we just cannot give in to such an aggression, which would then be an invitation to pursue this kind of aggression.  Now we all know that in an exceptional period markets do not normally function. And we are driven in many areas not by normally functioning markets, but by incredible speculative movements, which has pushed food and energy up. And when you look at the inflation, it’s mainly pushed by the price hikes of energy and food beside the causes I’ve mentioned on the value chains.  And those who now say that it’s because of the Green Deal that we have inflation. They just do not tell the truth because we have not yet seen finally some real impact of the Green Deal. We see now that even coal factories are relaunched. So we have not yet seen any real impact on this by the Green Deal. But what we know, by the way, is that due to the war, climate change is continuing. Climate change does not wait, it’s just there. And we have seen it now recently again in Italy with this catastrophe.  So I think that we have to be now serious on really trying to mitigate the impact of inflation. And therefore, social is so important because social means that we have to work on the cohesion of our societies because there is also speculation, speculation on dividing our societies even more, on creating new kinds of divisions inside our societies, but also among European countries.  And therefore, I think the best way now to deal with this is not each Member State individually – certainly a lot of measures have to be taken individually by Member States – but what is needed now is a good European-wide coordination in order to make sure that we are not at the end dividing Europe in those who are able to help and those who have more difficulties to help. And this is a broad issue.  The unity of the union is needed more than ever now. And therefore, unity means working on social Europe, working on the principles of the pillar, but adapting also our policies to the exceptional situation of something which is close to a war economy we are going through.  And we have to convey to our citizens the real messages that we are ready to help. We are ready to support their purchasing power, the way how they have to try to make ends meet, as it has been said by colleagues, but also to have companies who will be affected by the fact that they have energy problems, the prices, but also perhaps the supply of fundamental energy will be blocked specially by the Russians.  And so it’s not the sanctions who have created inflation, it’s the war mainly. It’s the fact that markets are overshooting due to speculation and when the OECD International Energy Agency considers that about 200 billion special windfall profits have been produced by the fact that markets are not rationally behaving any more – and some certainly take their advantage out of this – then I think we have to draw the right consequences from that and not put into question now the Green Deal, which is an issue which we cannot escape from.