Governor Rehn focused on European economic policy in times of crisis and implications for Finland. First, the crisis triggered by the COVID-19 pandemic and, in recent months, the energy crisis due to the Russian aggression against Ukraine have shown in full force that Europe can only stand up in times of energy, fiscal and monetary challenges through deeper coordination of its national policies and adherence to the proven rules. There is a significant risk of a weaker recession in Europe over the coming winter, while the Finnish economy is likely to stagnate during this period.

While tighter monetary policy will not lead to reducing energy prices, it may help to tame the wage-inflation spiral. Public confidence in European monetary policy has so far been preserved. Olli Rehn believes that during the upcoming winter it will be crucial to make the most of the flexibility in energy demand and savings in consumption. Finland is the European leader in renewable and emission-free energy, with biomass, hydro, wind and nuclear playing a key role. Europe can emerge from the current crisis with preferably neutral fiscal policy tackling inflationary pressures, structural reforms and a strengthened united European approach to economic policies.