Even during the pandemic, the EU has temporarily suspended its deficit and debt rules. Due to the consequences of the war, this has now been officially extended until the end of 2023. It is feared that the Commission’s call for efforts to reduce debt will not be taken seriously everywhere.
In many places, the billions spent fighting the effects of Corona have not even been consumed and states are already facing new challenges: energy prices, which have risen exorbitantly as a result of the conflict in Ukraine, and the rise in prices caused by high inflation are a burden on households. Tax cuts on fuel, aid packages for the socially disadvantaged, etc. are causing the shortages to rise again.
Also in Austria, Finance Minister Brunner had to admit that there will probably be more than 3% new debt this year instead of the planned 2.3%.
But of course countries that were already much more in debt, such as Greece, Italy or Cyprus, have a much bigger problem. That is why there has long been discussion about adapting the “Maastricht rules” (maximum 3% deficit and 80% government debt) to reality, because the debt ceiling in particular is completely unrealistic for some.
Given the current economic data, Brussels was expected to suspend the Stability Pact for another year, namely until the end of 2023. At the same time, this also gives more time to adjust the debt rules. Recently, it has been pointed out several times that one should by no means think of accepting higher deficits as the norm. Economic Commissioner Gentiloni called on member states to step up their debt reduction efforts.
Ten states (Austria is not included) are under “special observation” by the commission because of their budgets.
Source: Krone
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
