The European Commission does not want to return to the budgetary rules that the EU member states must adhere to in regular times until 2023.
The condition is that economic activity in the union is on average at the same level as before the corona crisis, with the indicator at the end of 2019, according to the daily EU administration.
“There is hope on the horizon for the European economy, but the pandemic continues to damage the economy and the livelihoods of citizens,” said Vice-President Valdis Dombrovskis. “Our message is that support measures must continue for as long as necessary. Member States should also make the most of the European Recovery Fund because it gives them the unique opportunity to support their economy without subsidies on public finances.
The temporary recovery fund contains 672.5 billion euros, of which 312.5 billion euros is distributed among the 27 countries as grants and 360 billion euros is available in favourable loans. The money is intended to invest in sustainable and digital projects, which must be offset by reforms in, for example, the labour market or the pension system. A maximum of almost 6 billion is available for the Netherlands. The caretaker government has announced that it will not make use of the loans.
In March last year, EU finance ministers agreed to the committee’s proposal to abandon fiscal rules related to the corona crisis temporarily. By activating an “escape clause” in the Stability and Growth Pact (SGP), which lays down the rules, Member States do not have to adhere to a budget deficit below 3 percent of gross national income (GNI) and a national debt of no more than 60 percent of GNI. As a result, EU countries can now pump as much money into their economies with impunity as is needed to preserve businesses and jobs as much as possible.
Due to the extra billions of expenditure on combating the crisis, the countries’ deficits and debts are rapidly increasing. The committee argues that once health risks diminish, the EU should gradually tighten its fiscal rein again.