Korea-EU Macroeconomic Dialogue Held: "Active Cooperation to Stabilize Supply Chains"

The view of Busan Port Sinsundae Pier on the afternoon of the 31st of last month [Image source=Yonhap News]

The Ministry of Economy and Finance announced on the 8th that it held the 10th Korea-EU Macroeconomic Dialogue with the European Union (EU) Commission on the 7th in Brussels, Belgium, and agreed to strengthen policy cooperation on major economic issues such as inflation going forward.

The Korea-EU Macroeconomic Dialogue has been held annually since May 2010 under the Korea-EU Framework Agreement, but it had not been held since the 9th dialogue in December 2019 due to the spread of COVID-19, resuming after about two and a half years.

Both sides evaluated in this dialogue that the global economy has gradually been recovering from the impact of COVID-19 this year, but downside risks to the economy are widely present due to the Ukraine crisis, inflationary pressures, and supply chain disruptions.

The EU side expressed concern that the unprecedented geopolitical uncertainty caused by the Russia-Ukraine war is exacerbating sharp rises in energy, raw materials, and food prices, resulting in broad and high levels of inflationary pressure.

The EU side forecasted that private consumption will be the main driver of economic recovery and growth in the future, emphasizing ▲ securing fiscal sustainability ▲ growth-friendly debt reduction, investment, and structural reforms ▲ promotion of green and digital transitions.

The Ministry of Economy and Finance also assessed that inflation will continue for the time being due to rapidly recovering demand, emphasizing ▲ stabilization of the livelihood economy ▲ timely response to domestic and external risks and macroeconomic stability ▲ revitalization of private sector, market, and corporate activities as key policy directions of the new government.

In particular, the Ministry requested consideration of each country's policies and systems when introducing measures that may cause unexpected negative impacts on other countries, such as the recent introduction of the EU's Carbon Border Adjustment Mechanism.

Through this meeting, both sides agreed to restore the macroeconomic dialogue channel that had been suspended and to strengthen policy cooperation on major economic issues.

The Ministry of Economy and Finance explained, "Both sides agreed on the need for active cooperation and joint response to prevent the recent spread of protectionism and contraction of global trade and to stabilize supply chains," adding, "The 11th dialogue will be held at an appropriate time next year in Korea through mutual consultation."

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