The Malta Independent 13 August 2022, Saturday

Inflation prospects

Alfred Sant MEP Thursday, 4 August 2022, 17:05 Last update: about 8 days ago

Chances are increasing that inflation will remain with us for longer than government and private sector decision makers were thinking or hoping. On the one hand, they still have been saying that “some” inflation is desirable in order to stimulate investment prospects and economic growth. On the other hand, they worry now that the impetus with which, for a number of reasons that are not all linked together, prices have surged is too steep. It has become too difficult to predict how it will go.

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In such circumstances, the forecasts that are still being made (though with a caution which was formerly not there) by institutions like the European Central Bank – envisaging that in two years’ time, the annual inflation rate will have again dipped close to 2 per cent – are being considered with deep scepticism.

In and of itself, this gives rise to the prospect of seeing inflation persist over the longer term. When economic agents plan their activities into the future with such a mindset, they multiply the chances for inflation to persist.                

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REALLY “SELF-EMPLOYED”? 

The majority of “advanced” economies have robust laws which regulate how employees and workers are dealt with in most private and public sectors. These set minimum conditions about pay, holidays, social protection, health and other areas. Recently, measures have also been introduced to safeguard the so-called life work balance of employees, and much rhetoric about this has been registered.

Still what has also been happening in all these economies is that employers have found ways how not to have to observe all relevant regulations. It has been done by converting the work output expected from an employee into an activity that can be contracted out to a person, who being “self-employed” will have to see on his/her own how to regulate his/her own work conditions.

The practice is spreading across many sectors of activity, including government projects.                        

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GOVERNANCE IN THE EU 

Several European institutions have come, still come, to preach to us regarding how to improve our governance, and they might be correct regarding the defects they discover here.

However, EU institutions themselves still have a lot to do to upgrade their own governance.

Every year, the Council of Ministers refuses to accept scrutiny over its expenditure accounts.

The European Commission operates recruitment and promotion processes for its staff that lack a true transparency, sometimes in order to indulge in rampant mutual backscratching and favouritism.

The European Parliament is being accused of aiming to hugely increase its expenditure in order to accomodate in the best of ways, cliques of beneficiaries who are close to the leaders of the political groups in the Parliament.

In order to bring its staff to heel, the Central European Bank functions by maximising the number of people it employs under a temporary contract.

The European Investment Bank brazenly ignores basic measures needed to ensure the occupational health of its employees.

At the European Court of Auditors, the President and some other directors have systematically abused the rules of the institution governing payments and privileges.

Other scandals relating to abuses in management have been raised and are still open among others at the European Asylum Agency and Frontex.  

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