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The European Commission Will Keep Deficit And Debt Limits Suspended In 2023

By Cristian Bustos. Originally published at ValueWalk.

European Commission

The European Commission will propose to keep the rules that limit debt and deficit suspended. The governing body is said to do so in 2023, one more year than initially planned. The move is due to the economic impact of the Russian war in Ukraine.

The European Commission’s Move

The decision was adopted at the meeting of the college of commissioners Wednesday and will not be announced until Monday, according to the Financial Times, which said there is “consensus” on this decision.

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Still, the suspension during a new exercise of the fiscal rules will have to be ratified by the governments of the block. This process is not expected to be “very difficult”, according to European sources.

“Although political pronouncements on the issue have at times seemed quite divided, I don’t think the underlying disagreement is that great. Everyone understands that next year is not going to be a normal year and that whatever rules we have in place have to be implemented.” intelligently,” said a senior European official.

The first opportunity to listen to the opinions of the community partners will be Monday afternoon, when a meeting of the Eurozone Economy and Finance Ministers is scheduled to take place in Brussels.

Caution

Before the meeting, the economic vice president of the European Commission, Valdis Dombrovskis, and the Commissioner for the Economy, Paolo Gentiloni, will present the annual set of economic advice to each Member State at a press conference, revealing their decision on tax rules.

Every year, Brussels issues a series of economic recommendations for each country, although, with the Stability and Growth Pact suspended since the pandemic, the community authorities do not evaluate compliance with the deficit and debt targets of each partner.

However, during these two years, the European Commission has asked the most indebted countries in the block for fiscal caution, which is likely to be repeated on this occasion.

The bid to continue freezing the rules of a deficit of less than 3% of GDP to bring the debt below 60% of GDP, comes after the European Commission lowered its growth forecast for the eurozone by more of one point due to the impact of the war, leaving it at 2.7% for this year.

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