Satisfied that the economy has held up better than expected this winter and that the risks to the economy are “broadly balanced”, eurozone finance ministers reaffirmed on Monday 13 March that “there is no justification for large-scale fiscal stimulus to boost aggregate demand”.
In its statement adopted in reaction to the European Commission’s 2024 budget guidelines (see EUROPE 13137/6), the Eurogroup does not mention the deactivation of the general escape clause of the Stability Pact, which the Commission suggests should not be extended beyond the end of 2023. It recognises the importance of “prudent” fiscal policies, aimed at ensuring sustainable public debt in the medium term and stimulating investment in the climate and digital transitions.
The Twenty note that while the emergency measures have helped those households and businesses most affected by soaring energy prices, the budgetary cost of the measures is a burden on public finances. “We should avoid permanent deficit-increasing measures”, they note.
Ministers commit to further targeting energy measures and, barring a new tariff shock, to phasing them out. With an eye to the coming winter, however, they say they are ready to intervene again to help the most vulnerable socio-economic groups, as well as to encourage energy saving, energy efficiency and the acceleration of the reduction of independence from Russian hydrocarbons.
See the Eurogroup statement: https://aeur.eu/f/5r8 (Original version in French by Mathieu Bion)