EU ministers discuss unprecedented suspension of budget rules

in News · 23-03-2020 11:06:00 · 0 Comments

The European Union (EU) Ministers of Economy and Finance will discuss on 23 March the temporary suspension of the rigid Brussels budget rules, allowing for deviations in areas such as the deficit, given the impacts of the Covid-19 pandemic.

In a meeting held by videoconference that starts at 3pm (local time, minus one in Lisbon), the so-called Ecofin will debate the measure proposed last Friday, 20 March, by the President of the European Commission, Ursula von der Leyen, an “unprecedented suspension” of the budgetary discipline rules imposed on EU countries to allow member states to “stimulate as much as they want” their economies in times of crisis.

“Today [Friday] - and this is unprecedented and has never been done - we have triggered the general safeguard clause, which means that national governments can stimulate the economy as much as they want. We are relaxing budgetary rules to allow them to do so,” announced Ursula von der Leyen, in a video published on the social network Twitter.

The Community executive therefore proposes to activate the derogation clause in the scope of the Stability and Growth Pact, a measure that, once approved by the Council, will allow Member States to temporarily deviate from the normal obligations set out in the European budgetary framework, in order to allow an effective response to the crisis.

In practice, this means less rigid fiscal targets on issues such as the deficit, suspending part of the recommendations for the stability of public accounts.

Ursula von der Leyen justified the measure with a “dramatic impact” of the Covid-19 crisis on the economy, by reaching “most sectors of the EU”.

"The suspension of our public life is necessary to contain the virus, but it also severely slows down our economy," she said.

By the middle of this month, the European Commission had already admitted that, in the event of a “severe economic slowdown” in the Eurozone and the EU, due to the impacts of Covid-19, it would suspend the budgetary adjustments recommended for member states.


Comments:

Be the first to comment on this article
Interactive Topics, send us your comments/opinion on this article.

Please note that The Portugal News may use selected comments in the printed edition of the newspaper.