The Eurogroup asks to limit the support to those vulnerable to the rise in prices
The Ministers of Economy and Finance of the euro zonethe Eurogroup, have opted to guarantee that the national measures to alleviate the rise in prices derived from the energy crisis are “fiscally affordable”, that preserve price signals and that limit its fiscal measures to the most vulnerable.
Paolo GentiloniEuropean Commissioner for the Economy, has announced that it has been calculated that “around 70% of the measures taken by the Member States to date are non-targeted, meaning that they benefit everyone, or a very large part of the population, and not only the most vulnerable“. However, he has stated that he is “aware that targeting is not always easy, neither politically nor technically” and has explained that the data “supposes an improvement compared to a couple of months agowhen around 80% of the measures were not specific”.
Although there have been no references to no precise experiencethis position comes weeks after the plan announced by Germany to allocate 200 billion euros to reduce the final consumer’s energy bill, which aroused the misgivings of several partners. “Economic sentiment has deteriorated since the summer and survey data points to a contraction in economic activity this winter,” Gentiloni detailed, while “the main positive point continues to be the situation of the labor market”.
Regarding the economic forecasts, in which the European Commission will go into detail on Friday, Gentiloni has advanced that “many indicators show that a contraction of the economy is probable” and has encouraged “work to prevent that contraction of the winter months from becoming a prolonged period of recession”. To achieve this, he has advocated for work together to improve results on this front, especially as energy prices are expected to remain high for some time. All this at a time when inflation in the euro area has risen to 10.7%mainly driven by high energy prices.
Coordination and new president
In this sense, the president of the Eurogroup and Irish minister, Paschal Donohoehas called for coordination to encourage the energy transition, while highlighting, as a positive point, the resilience of the banking sector: “It is a advantage for our economies, although it is not immune”. For his part, the head of the European Stability Mechanism, Rolf Strauchhas highlighted that the common position of the Member States is “clarity” in the fiscal rules, in addition to these being “realistic and affordable.”
The message launched by Gentiloni and Donohoe appealing to the Unit and the coordination of the Member States in the face of the energy crisis and high inflation has also been shared by some finance ministers of the Nineteen. Thus, the Belgian Finance Minister, Vincent van Peteghem, has requested that, in these challenging times, one can “predict what is going to happen”, for which he has asked for “a good compass”. “It is important that we show unity, that we act in a coordinated manner,” she added, while he asked to focus on what he called the “holy trinity,” referring to the sum of the debt reduction, investment and structural reforms.
In similar terms, the French Economy Minister, Bruno LeMaire, who has called for “perfect coordination between monetary and fiscal policy” and has appealed to his counterparts to remain “clear, united and strong from the beginning.” “This is not the time to give lessons to any Member State but to have a strong coordination between the Member States”, he concluded.
Finally, the ministers have declared open the call for candidates for take over from donohoe at the head of the Eurogroup when his two-and-a-half-year term expires next January, although the Irishman has expressed upon his arrival at the meeting his willingness to renew the position if he has the support of the rest of the partners. The elections will be December 5that the next meeting of the Nineteen, and the ministers who wish to apply for the position must inform of their intention before November 24.
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