As in 2023, the euro area countries are committed to maintaining a “contractionary” aggregate fiscal stance in 2024, of 0.5% of the euro area’s GDP each year, according to the draft recommendation for an economic and budgetary policy at euro area level included on the agenda of the meeting of the Member States’ ambassadors to the euro area on Wednesday 10 January (see EUROPE 13297/16, 13309/15).
This fiscal stance will be translated into prudent national budgetary policies, which will have to respect the limits in terms of net public spending set by the Council of the EU (see EUROPE 13203/28).
The Twenty are invited to finalise the lifting of the emergency budgetary measures put in place to deal with the impact of the Covid-19 pandemic and the energy crisis caused by Russian military aggression in Ukraine. In 2023, emergency energy measures amounted to 1.0% of euro area GDP and half of them were not sufficiently targeted at the most affected households and businesses, according to the draft recommendation. The net budgetary cost of these measures for 2024 is estimated at 0.2% of the euro area’s GDP.
Even in a situation of consolidation of public finances, euro area countries are invited to increase “as much as possible” public investment aimed at accelerating the digital and climate change transitions. This should be the case in 2023 and 2024 with the support of the Next Generation EU Recovery Plan and the EU Structural Funds.
The draft recommendation will be on the Eurogroup agenda on Monday 15 January, as part of the 2024 edition of the ‘European Semester’ budgetary process.
To see the draft recommendation, go to https://aeur.eu/f/abx (Original version in French by Mathieu Bion)