three years later bar open at public expense and one expansionist policyIn response to the coronavirus pandemic and Russia’s war in Ukraine, eurozone countries are already preparing to tighten their belts. This budget guidance According to the declaration adopted this Thursday by the eurozone economy and finance ministers, the eurozone More “restrictive” in 2024 for governments to rebuild tax buffers and to support the monetary policy of the European Central Bank. includes high inflationIt remains a source of “concern” for the Eurogroup.
“The Eurogroup remains concerned about the impact of the crisis. inflation Warns the statement advocating addressing the impact of “persistent inflation” on the eurozone economy and its consequences for our citizens and businesses” and higher borrowing costs to reduce deficit and debt ratios over time.
As such, “a determined, gradual and realistic financial consolidation strategyThey point out, in line with recommendations launched by the executive community in May, which strengthens budget sustainability, rebuilds budget buffers, ensures greater sustainable growth and strengthens the eurozone’s resilience in the face of future challenges, including intergenerational equality: as well as structural reforms and a recovery plan. calls for increased investment.
Gradual withdrawal of aid
“After three years of expansionary policy, we propose a more restrictive fiscal policy based on the gradual removal of support measures for energy prices, as we have already done in our May package,” said the Economic Commissioner. Paolo Gentiloni. Brussels insists that stimulus withdrawal is the first thing to do to mitigate the impact of the energy crisis on homes and businesses. It’s a pervasive message among eurozone governments.
The statement does not include specific figures for the structural adjustment that will be required, but diplomatic sources said: 0.5% and 0.8% in line with the commission proposal. “In line with the previous statements of the Eurogroup, we will avoid permanent measures to increase the deficit, in order to facilitate the permanent reduction of the deficit and debt,” the Eurogroup said. “necessary” adjustments.
Calviño: avoid staggering
What will the advice mean for the new government that does not go to the polls in Spain? 23J? “It is essential to avoid discrediting the markets and international financial institutions with which we have worked so hard during these five years, opening up or disrupting uncertainties,” the vice president and economy minister warned. Nadia Kalvinostressed the importance of “responsible” fiscal policy. government Pedro Sanchez Over these years, it has allowed Spain to meet its deficit and debt reduction targets, and to gain approval from European institutions for the reduction path.
“It is necessary to continue with a responsible fiscal policy and to cut a hole in their public accounts and make it impossible for Spain to comply with European financial rules, which in turn should avoid statements and political directives that would undermine investors’ trust in our country and our country.” could curb the economy,” said Calviño, who will chair the meeting of the UN General Assembly this Tuesday. Council of Ministers EU Economics and Finance (Ecofin).
Tax reform in the fall?
As the EU’s six-month presidency, Spain will be responsible for leading the discussion on fiscal rules reform since 1 July, and Spain’s first step will be to propose Spain during a working breakfast this Friday. document containing “four elements” According to Calviño, this should turn tax reform. In the first place, the relative weight and margin that institutions, the Commission and the Council will have in applying the financial rules. Second, what could be the key parameters to ensure reliable debt reduction pathways that lead to fiscal sustainability but are also compatible with sustaining economic growth and job creation? Third, mechanisms to ensure effective compliance and, finally, how to ensure that the new fiscal framework allows financing of necessary investments.
“What we’re doing is laying the groundwork for intense negotiation that will allow us to reach an agreement before the end of the year.” calvino “Trying to move forward”, which hopes to give the green light to a task force they will develop during the month of August and laying the groundwork for trying to reach a “political level” agreement this fall to offer a landing zone in October.
As Commissioner Gentiloni adds, reaching an agreement on fiscal rules “as soon as possible” will be key to achieving a balance in the 2024 fiscal orientation. “It is very important to reach an agreement by the end of the year to maintain the balance we now propose for next year’s budget,” he said. The last discussion, held in mid-June, revealed that there are particularly large differences between the two main economies of the eurozone. France and GermanyDue to the automatism in the rules required by Berlin, the meeting ended in skirmishing.