Eurozone finance ministers ruled out activating the European Union’s fiscal escape
Eurozone finance ministers ruled out activating the European Union’s fiscal escape clause, signaling a more constrained phase in managing the energy shock as governments face rising costs with limited room for maneuver.
The message from the Eurogroup was clear: there will be no activation of the EU’s fiscal escape clause, as the conditions for a severe economic downturn have not been met, thus limiting the scope for broad fiscal support.
European Commission Executive Vice President Valdis Dombrovskis underlined that the mechanism is designed for deep recessions, not the current slowdown. The economy, in other words, is holding up but is under increasing pressure.
The decision means governments must operate within existing fiscal constraints, without the kind of coordinated European “umbrella” deployed during the pandemic.
Toolbox approach replaces broad easing
Instead of broad fiscal flexibility, policymakers are turning to a more limited set of options, namely a “toolbox” of measures that can be deployed at national level.
These include energy tax reductions, targeted subsidies, support for industry and possible interventions in pricing mechanisms. However, there is no agreement on common measures, and their use will depend on each country’s fiscal space, reinforcing a fragmented response across the bloc.
Content Original Link:
Read Full article form Original Source OIKONOMIKOS TAXYDROMOS
" target="_blank">Read Full article form Original Source OIKONOMIKOS TAXYDROMOS
