Wednesday, 6 october 2021
Hello Future is blue readers,
This week we are covering the energy price crisis. This is a subject that is very concerning as many fear we are approaching an expensive winter.
Can this trend compromise the ambition of the EU’s green agenda? We’ve recorded a new podcast featuring Annika Hedberg, Head of Sustainable Prosperity for Europe Programme at the European Policy Centre (EPC), and Raymond Torres, Funcas Europe Director. The episode is presented by Carlos Carnicero Urabayen. More details below.
We’re also including two articles that are being released today as part of Funcas new edition of its flagship report Spanish and international economic & financial outlook.
Raymond Torres has taken a close look at the spike in Spain’s inflation and what this means for economic recovery and for future economic developments. Erik Jones, who is Director of the Robert Schuman Centre for Advanced Studies at the European University Institute, has written about the ECB’s new strategy that was announced in July.
High CO2 prices are coming on top of climbing gas and oil prices. On the other hand, energy demand keeps rising as European economies are recovering. It’s likely that this trend will continue which should be a reminder for everyone that this is not about questioning the EU’s green agenda, but rather taking very seriously the challenges we are facing transitioning to renewable energies.
The spike in Spain’s inflation and its impact
The upward trend in Spanish inflation has been driven by rising input costs, the abrupt nature of the global recovery and nascent structural transformations accelerated by the pandemic. While the immediate effect is a slowdown in the pace of recovery, further ahead, if global inflation becomes sustained, the perception of central bank independence will be key.
The ECB’s new look
The results of the ECB’s monetary strategy review announced in July suggest Christine Lagarde has succeeded in her promise to transform how the ECB works and how it communicates with the outside world. However, her first real test will come as the Bank begins to unwind its unconventional monetary policy instruments.
What we are reading
Europe’s energy crisis threatens to reignite disputes within the block
The energy crisis has touched on some of the EU’s most sensitive internal debates, from the bloc’s approach to carbon taxes, dependence on Russian gas, upcoming rules for sustainable finance, and the pending revision of EU spending rules.
Will China use climate change as a bargaining chip?
Interesting read on China’s strategy ahead of the COP26 conference.
We must reform trade to build a sustainable inclusive global recovery
“It is critical that we re-evaluate where trade and investment have helped – and where they have hindered. We need to go back to the basics: what is trade for? And how can it provide better outcomes for people and planet?”
Do robots dream of paying taxes?
The digital transition should be managed and taxed alongside other societal transitions, but any tax on companies that replace employees with automated systems should be targeted and carefully designed to not stifle innovation”
Have a nice rest of the week!
Raymond Torres, Funcas Europe Director