The European Union's (EU) economy has reached a turning point, with forces that were driving growth having "largely faded away," European Commission Executive Vice-President Valdis Dombrovskis said on Tuesday in Brussels.
The first half of the year saw surprisingly strong growth, but "the outlook for economic growth now looks significantly weaker than in the Commission's summer forecast, while inflation will stay higher for longer," Dombrovskis said.
Annual inflation in the eurozone reached a record 10.7 percent in October. In the third quarter, seasonally adjusted gross domestic product (GDP) increased by 0.2 percent compared to the previous quarter in both the euro area and the EU, according to Eurostat.
Dombrovskis said that in a difficult geopolitical context, the EU must urgently accelerate its transition towards cleaner energy and away from fossil fuels -- particularly those from Russia.
The Commission also informed ministers on the United States' new Inflation Reduction Act, and on its consequences for the EU. Czech Minister of Finance Zbynek Stanjura said it could have a negative economic impact on EU businesses and investors, especially in the technological sector.
A trade war between the U.S. and the EU must be avoided, while keeping a fair playing field in international trade, Stanjura said.
French Finance Minister Bruno Le Maire said on Monday that the U.S. law is a major threat to European companies, and predicted that the EU would come up with "a strong response."
"I have not been assured that the American side has completely grasped how great our concerns about the consequences are," said German Finance Minister Christian Lindner.