This open bar period in public spending and fiscal easingContinuing with the suspension of financial rules after Russia’s invasion of Ukraine and put into practice to keep the European economy alive during the Covid epidemic, finished. Eurozone economy and finance ministers completed this phase Monday and agreed to return to prudent fiscal policies and avoiding measures that increase the deficit permanently. “We reiterate that in light of the economic outlook and in the context of higher inflation and tighter financial conditions, a general fiscal stimulus is not justified,” the statement accepted by the Eurogroup said.
“For the second time in recent months, the Eurogroup recognizes that the current level of financial support in our economies must change at a time when the inflationary environment is beginning to change,” said the Eurogroup president. meeting. eurozone, Paschal Donohoe. The eurozone countries’ statement is a response to the 2024 budget guidelines issued by the European Commission last week, which asked governments to take into account the deactivation of the general flight clause (and the return of the deficit) at the end of the year. and debt targets), prepare multi-year budget adjustment plans until the end of April.
In the open state, governments budget deviation below 3% GDP In the case of debt in countries with a “significant or moderate public debt problem”, such as Spain, during the period covered by the plan, i.e. by 2026 at the latest, one of the plans reasonable and sustained reduction or maintenance at “prudent levels” in the medium term. “We agree that prudent fiscal policies should aim to achieve debt sustainability over the medium term, while sustaining potential growth and addressing green and digital transitions and resilience targets through investments and reforms, through 2023-24,” the political declaration states. .
clear procedures
The Commission document also high macroeconomic and budget uncertaintyThere will be no excessive open breach procedures this year, although they may return from the spring of 2024. This is an element that is not mentioned in the declarations of eurozone ministers due to the inconsistencies of countries such as the Netherlands or Germany. “We expected the commission to launch excessive open trading this year. It’s a missed opportunity because it could support and help numeric recommendations. fix the oversupply”, guess diplomatic sources.
“The reason we didn’t mention the excessive deficit procedure is because many members of the Eurogroup are convinced that such a measure interferes too much with all aspects of governance that are Ecofin’s responsibility. But there is a very clear consensus on how to implement fiscal policy next year,” Donohoe assured. “The reason is clear. We are in a transitional moment. The general escape clause has been in effect for 4 years. We need a gradual shift, and that means we’ll be launching extreme open trades next spring, not this year, if the data shows.he said. In the view of First Vice President and Minister of Economy Nadia Calviño, it is positive that excessive deficit procedures will not be opened this year because “we are all still very much affected by the impact of the war.”
The declaration also reaffirms the commitment of Eurozone governments to gradually withdraw the measures approved to deal with the impact of the energy crisis. “In the absence of new price crises, We will continue to gradually remove measures to support energyThis will also contribute to reducing the public deficit”, further underscoring the intention to continue to protect the most vulnerable households and wealthy companies while maintaining incentives to limit energy consumption and improve energy efficiency. “The only permanent solution to the energy crisis is to further reduce reliance on fossil fuels.”