by Jan Strupczewski
BRUSSELS (Reuters) – Euro zone fiscal policy will be stricter next year but several countries, including France and Italy, plan to spend too much, going against European Union recommendations, announced the European Commission on Tuesday after analyzing the budgetary projects of the euro zone states for 2024.
“The general fiscal stance of the euro area is expected to be restrictive in 2024 due to the end of energy support measures,” she said in a statement.
In its forecasts of November 15, the European executive estimated that the budget deficit of the twenty euro zone countries would amount to 2.8% of gross domestic product (GDP) in 2024, compared to 3.2% this year. a forecast capable of satisfying the European Central Bank (ECB) which has maintained its interest rates at record levels to counter inflation.
The successes of the monetary tightening carried out by the ECB were obtained at the expense of economic growth, which slowed down in 2023 – 0.6% compared to 3.4% in 2022.
The Commission is carrying out a review of the budgetary plans of euro zone states to monitor whether governments are respecting the rules set by the framework of the Stability and Growth Pact, which aims to strengthen economic governance and budgetary surveillance in the euro zone .
This review is carried out within the framework of criteria established earlier in the year which stipulate that governments must not reduce their investments, must withdraw energy support measures launched during the energy price crisis in 2022 and use savings to reduce deficits to keep spending growth within limits set by the Commission and agreed by EU finance ministers.
“A number of draft budget plans plan to continue prudent fiscal policies, withdraw energy support measures in 2023 and 2024 and use savings from these measures to reduce the deficit,” the Commission said.
She said she was of the opinion that “the draft budgetary plans of Cyprus, Estonia, Greece, Spain, Ireland, Slovenia and Lithuania are in line” with the Council’s recommendations. .
“The draft budget plans of Austria, Germany, Italy, Luxembourg, Latvia, Malta, the Netherlands, Portugal and Slovakia are not fully in line with the recommendations of the Council,” she added.
“The draft budget plans of Belgium, Finland, France and Croatia risk not complying with the Council’s recommendations,” continued the European executive.
“The Commission invites Belgium, Finland, France and Croatia to take the necessary measures (…) to ensure that the 2024 budgetary policy is in line with the Council recommendations issued in July 2023,” it is stated. written in the press release.
These recommendations included increasing net primary expenditure for 2024 – an indicator that is expected to become the key criterion for the new rules, which aim to gradually reduce public debt over a period of four to seven years.
(Reporting Jan Strupczewski; French version Zhifan Liu, edited by Jean Terzian)
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