EU finance ministers will call for a “moderately supportive” fiscal stance in the euro area in the recommendation on the economic policy of the euro area that they will adopt on Tuesday 18 January.
The draft recommendation will be endorsed without any changes to the version analysed by the Member States’ ambassadors to the European Union (Coreper) on Wednesday 12 January.
This expansionary stance is expected to reach 1.75% of GDP in 2021 and 1% of GDP in 2022, according to European Commission forecasts (see EUROPE 12839/1). This gradual decrease reflects the progressive shift from emergency budgetary support to address the Covid-19 pandemic to more targeted aid to the sectors most affected by the health measures.
The Ecofin Council, which will start the debate on the reform of European fiscal rules with a view to reaching a common framework for reflection by the end of February (see EUROPE 12865/15), maintains the line of deactivating the general escape clause of the Stability and Growth Pact “from 2023”.
In the framework of the ‘European Semester’ budgetary process, the Ecofin Council will also adopt two texts of conclusions, one on the alert mechanism for macroeconomic imbalances, and the other on the 2022 round of the Annual Sustainable Growth Survey.
See the draft policy recommendation for the euro area: https://bit.ly/3KhAMZx (Original version in French by Mathieu Bion)