In a statement adopted on Thursday 13 July, the finance ministers of the euro area countries recommend “a restrictive fiscal stance” at euro area level for 2024, without setting an average target for reducing public deficits.
Although it expects growth to strengthen next year, the Eurogroup is of the opinion that the downside risks to the economy predominate. Inflation remains too high and requires careful monitoring of its key determinants, “particularly (business) margins and wage trends”, according to the Eurogroup.
Against this backdrop, the ministers are recommending a strategy of “determined, gradual and realistic” fiscal consolidation of public finances in order to rebuild fiscal buffers to withstand any macroeconomic shocks. This means dismantling the emergency measures taken in 2022 to help households and businesses cope with the energy crisis exacerbated by the Russian invasion of Ukraine.
National fiscal policies should be based on the country-specific recommendations issued by the European Commission to the Member States (see EUROPE 13187/22), and in particular on quantitative and “differentiated” adjustment efforts according to national fiscal situations.
To see the Eurogroup statement: https://aeur.eu/f/826 (Mathieu Bion)