Eurozone finance ministers support budget adjustment in 2024

Eurozone finance ministers are backing the European Commission’s plan to resume budget adjustments to reduce the deficit in the “medium term”. This was stated in the statement, which was agreed at the Eurogroup meeting in Brussels on Monday. “We agree that a productive fiscal policy in 2023 and 2024 should aim to guarantee debt sustainability in the medium term,” the eurozone economic leaders said in a statement.

“Against the backdrop of the economic outlook and high inflation and tighter financial conditions, we reiterate that general fiscal stimulus to aggregate demand is not warranted,” the statement said.

What the European Commission did last week was prepare the ground for member states to begin adjusting next year’s budgets according to fiscal guidelines, after several years of suspending fiscal rules that, in practice, allowed deficits and debt diversions. Pandemic crisis and subsequent war in Ukraine.

But the open bar ended last year, and so Brussels is warning on the 27th that they should start easing expansionary policies. However, this year, and while the new fiscal rules are being negotiated, the escape clause will remain in place, so there will be no opening of files for countries that pass.

Germany has threatened to distance itself from the deal by demanding that the files be opened in 2023, even though the suspension of tax regulations is in effect until December 31, 2023. The Netherlands was also in favor of this position. EFE agency reports the information.

The first vice-president, Nadia Calvino, categorically denied this upon arrival in Brussels: “The most important thing is that these excessive deficit files will not be opened in 2023, which continues to be an absolutely extraordinary exercise due to the need to mobilize public resources. Responding to the effects of the war in Ukraine and, above all, supporting companies and citizens.” In the case of Spain, he recalled that plans worth 45,000 million euros were activated.

Finally, the ministers of economy supported the proposal of the commission. This, according to Economy Commissioner Paolo Gentiloni, is a “strong signal” that an agreement on fiscal rules is closer.

What is also included in the 2024 fiscal guidelines is the gradual elimination of measures taken to ease the energy crisis. “We are gradually moving from broad support to more specific measures with better design, efficiency and affordability,” said eurozone economic managers, who believe they are good to go once price “shocks” have been overcome. Phasing out of these measures helps reduce the deficit.

Source: El Diario

share
George

George

comments

Comments

related posts

Post List

Hot News

Trending