MoEF and EU Commission hold 'Economic Dialogue'... Discuss responses to geopolitical risks and fragmentation

Discussion on Fiscal Policy and Economic Security
Urging No Unfair Discrimination Against Offshore Companies

The Ministry of Economy and Finance discussed cooperation measures on economic and financial policies, economic security including supply chains, with the European Union (EU) Executive Commission, the EU's executive branch.

According to the Ministry, on the 31st of last month (local time), Director Min Kyung-seol of the Foreign Economic Affairs Bureau and his delegation held an economic dialogue in Brussels, Belgium, with the EU Executive Commission delegation led by Annika Eriksdotter, Director of International Economic Affairs, exchanging views on macroeconomic trends and fiscal soundness policies. Marking its 11th session this year, the Korea-EU Macroeconomic Dialogue has been held annually since May 2015 under the Korea-EU Framework Agreement.

Both delegations evaluated that considering the shocks caused by the COVID-19 pandemic and the prolonged Ukraine war, the outcomes of policy responses were noteworthy achievements.

The Korean side forecasted export-driven economic growth this year due to improvements in overseas demand, such as the recovery of the semiconductor industry and increased investment from major economic zones, despite ongoing uncertainties like geopolitical risks and the fragmentation of the global economy.

The EU side also noted that EU member states directly exposed to geopolitical risks from the Ukraine war have faced significant difficulties such as high inflation and domestic demand contraction, but consumption is expected to gradually recover due to favorable employment conditions.

Regarding the fragmentation of the global economy, the Korean side introduced supply chain-related legislation such as the Supply Chain Basic Act and policies related to strategic industries like semiconductors and batteries.

The EU side explained the content and purpose of the 'Initiative to Strengthen Economic Security' announced on the 24th of last month, emphasizing the need for cooperation between the two sides as partners sharing common values.

Both sides also shared their positions on the importance of fiscal management in response to the pandemic, energy crisis, aging population, and climate response, including fiscal rules related to Korea-EU fiscal policies.

The EU side informed about the ongoing reform of the EU's fiscal framework, and the Korean side introduced the amendment to the National Finance Act currently pending in the National Assembly for the legalization of fiscal rules.

Meanwhile, taking this dialogue as an opportunity, the Korean side requested that burdens on Korean companies be minimized regarding policies pursued by the EU or its member states, such as the reform of France's electric vehicle subsidy system, the EU supply chain due diligence guidelines, and the EU carbon border adjustment mechanism.

This content was produced with the assistance of AI translation services.