EU finance ministers demand introduction of austerity regime in Greece due to…war in Ukraine

Debt Reduction… Called for by Finance Ministers in a Gradual and Realistic Way EUsending a signal similar to that of the Eurogroup about a return to austerity due to the war in Ukraine.

Today Ecofin agreed on the main directions of reforms in the European economy, according to the conclusions of the meeting.

The areas of concurrence of the views of the Member States on the reformed system of economic management are:

• The Stability and Growth Pact benchmarks of 3% for the budget deficit and 60% for the public debt-to-gross domestic product ratio at market prices remain unchanged. The economic management system must ensure that these baselines are met in a more effective, efficient and sustainable manner.
• All Member States are required to submit national medium-term fiscal and structural plans after the implementation of the reformed economic management system. National plans should cover fiscal policy, reforms and investment. Plans should set the national fiscal rate, determined by the level of net primary spending.
• Member States must ensure fiscal efforts to bring debt sufficiently low or maintain it at a reasonable level while maintaining the sustainability of public finances, facilitating reforms and public investment.
• The fiscal adjustment period could be extended if a member state commits to a range of reforms and investments that improve growth prospects and address EU strategic priorities such as public investment for a green and digital transition and strengthening defense capabilities.
• For all Member States, national plans must ensure that the deficit criterion is met, or that sufficient and credible progress is made towards meeting that criterion in accordance with any relevant advice from the council, as the case may be. The excessive deficit procedure for Member States exceeding the threshold of 3% of GDP will remain unchanged.
• For Member States with a public debt-to-GDP ratio above 60%, national medium-term plans should ensure that this ratio is sufficiently reduced.
• For Member States with a public debt-to-GDP ratio below 60%, but with debt problems, the national medium-term plan should ensure that this ratio is kept at a reasonable level. For Member States with low public debt problems, the fiscal course in national plans should ensure that deficits are reliably maintained below 3% on an ongoing basis or sufficiently reduced to this threshold, as well as maintaining the debt ratio at a reasonable level, taking into account the need to ensure the medium and long-term sustainability of public finances and avoiding unjustified accumulation of debt.
• The application of the rules should be more efficient, including through greater transparency. The overall supervisory system should include financial sanctions that should be less restrictive but more realistic in application.

The EU finance ministers call on the European Commission to take into account the concurring views of member states and continue to work with member states in areas where further discussions are needed before publishing its legislative proposals (in April).

Today’s conclusions on the reform of the economic management system must be approved by the European Council in the spring. The commission will then present its legislative proposal in early April with the aim of reaching political agreement in the Council and with the European Parliament before the end of the current legislative period.

It seems that economic sanctions against Russia, US monetary policy, as well as US LNG have seriously crippled the EU economy. And it will most painfully affect the economically weak countries of the European Union, such as Greece, for example, returning our country to the dark years of memorandums.

Source link