Fiscal policies: the EU has sent an important message to its member states

Fiscal policies: the EU has sent an important message to its member states

The European Commission said on Wednesday that European Union countries will move from 2022 to a neutral fiscal stance in 2023, heavily indebted countries to focus on tighter fiscal policy and low-debt countries to focus on more investment.

Based on the 2022 winter economic outlook, the Commission considers that the transition from a broadly supportive fiscal stance for the period 2020-2022 to a broadly neutral fiscal stance in 2023 appears appropriate and ready to respond to the changing economic situation. A committee.

The economic outlook for the winter came two weeks before the Russian invasion, which the Commission says will further affect growth in the eurozone.

As per the forecast, the Eurozone growth forecast in 2022 has been reduced to 4.0 per cent from the previously forecast of 4.3 per cent.

They added that the Commission is of the view that a gradual fiscal adjustment should be initiated to reduce high public debt from 2023 onwards, while a too abrupt consolidation could have a negative impact on growth and therefore debt sustainability.

Cover image source: Getty Images

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