In accordance with the deadline of 15 October each year set by the Stability and Growth Pact, the euro area countries have submitted their draft budget plans for 2021 to the European Commission. An exercise shaken by the Covid-19 pandemic.
The Commission will present its opinions on these plans on Wednesday 18 November, together with its recommendation on the fiscal stance at euro area level and its reports on macroeconomic imbalances and employment policies. Normally, it is during this period that the budget process for the ‘European Semester’ is launched for the following year.
However, in pandemic circumstances, the Commission already provided in mid-September socio-economic policy guidance to Member States, which launched in parallel the preparations for their national recovery plans in which they have to detail the measures and investments that will benefit from the financial support of the Next Generation EU European Recovery Plan (see EUROPE 12562/12). Portugal was the fastest in this respect.
In the event of an unfavourable opinion, the Commission would have to come forward by the end of October to ask a euro area country to amend its draft budget plan for 2021. However, it is already noted that the Pact’s general escape clause, activated in the Spring to allow Member States to commit budgetary expenditure to face the Covid-19, will be maintained in 2021 (see EUROPE 12574/6).
It should be noted that the European Fiscal Board will deliver its annual report on Tuesday 20 October, in which it will discuss the application of the Pact in 2019, the budgetary stance for the euro area and the reform of European fiscal rules.
See the 2021 draft budget plans of the euro area countries: https://bit.ly/37dr8Wn (Original version in French by Mathieu Bion)