Corona-Pandemic
EU Commission: debt-to-rules remain, 2021 expiry
EU Commissioner for economic Affairs, Paolo Gentiloni: “We need to guide the European economy through these rough and uncharted waters.” Photo: John Thys/AFP Pool/Reuters
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Economists expect for the next few months, rough seas, because the pandemic is raging in the world. A loose monetary policy to help more billions to counter them.
In the Corona-crisis, the EU reserve-States for the time being, a free Hand in the debt. “The General escape clause will remain in the year 2021,” said EU Commissioner Paolo Gentiloni following a meeting of the Euro group.
This means that the debt and deficit rules in the EU remain suspended. The discussion about a return to a more normal fiscal policy have not yet begun, said Euro group chief Paschal Dohonoe. “It’s not imminent.”
The EU member States had enabled the so-called escape clause – in English General Escape Clause – the stability and growth Pact in the spring for the first time in the history, so that EU States can combat the economic consequences of the pandemic.
This may deviate from the requirement that the budget deficit not higher than 3 percent and national debt must not be higher than 60 per cent of the gross domestic product. Germany, too, had taken tens of billions in debt and in short-time work assistance, as well as cash injections, loans and guarantees for companies and the self-employed put.
Donohoe stressed that for the time being, there is a very large Consensus in the circular of the Minister of Finance on the current line of the fiscal policy, in order to invest in the preservation of Jobs. Gentiloni said that the Use of the instruments used must be checked again and again. You would have to be targeted and be limited in time. Of course, there were differences between the first emergency phase and the longer-term recovery. However, the Transition will probably be fluent, said Gentiloni.
The next nine months would be a difficult and crucial time. “We need to redirect the European economy through these rough and uncharted waters,” said the Economics Commissioner. The most Important thing is to bring the appointed EU funds in the framework of the 750-billion-Euro programme for the economic recovery, now is really the Start. The Fund will strongly promote the needed trust and of the financial markets to be recognised.
In your Online session on Monday, the Euro group stood behind the candidacy of the Dutchman Frank Elderson for the Executive Board of the European Central Bank, as Donohoe said. The Dutch Central banker, would according to this proposal, the successor of the luxembourger Yves Mersch, who will be retiring in December from the ECB Executive Board.
For the Post, the Slovenian Bostjan Jazbec was in addition to Elderson in the race. The agreement reached by the Euro group is only a recommendation. The decision ultimately lies with the EU heads of state and heads of government. The ECB Executive Board is the governing body of the Central Bank. It has six members including the ECB President, Christine Lagarde. Germany is represented with the economist Isabel Schnabel.
