The strict debt regulations in the European Union are to remain suspended for another year in view of the Ukraine crisis. As the EU Commission President Ursula von der Leyen announced that the Stability and Growth Pact will not fully come into force again until 2024. The reason for this is the high level of uncertainty due to the Ukraine war, high energy prices and bottlenecks in the supply chains, the Brussels authorities said. Finance Minister Magnus Brunner (ÖVP) signaled approval.
However, German Finance Minister Christian Lindner stressed that this is not a license to accumulate more debt in Europe. He told the “Bild” that Germany would comply with the debt brake from 2023. Also
Economic Commissioner Paolo Gentiloni called for countries to control their spending. “Fiscal policy should move from universal support during the pandemic to more targeted action,” he said.
Die debt– and deficit rules were suspended because of the Corona crisis and should actually apply again from 2023. the EUAfter the summer, the Commission intends to present concrete proposals for a reform of the Pact, which could then come into force in the course of next year.
The Stability and Growth Pact provides that EU-Countries do not account for more than 60 percent of economic output debtrecord, tape. Budget deficits are to be capped at three percent of gross domestic product (GDP). Many countries exceed these limits, mainly because they are high during the corona pandemic debthad to absorb in order to support the economy. In Italy, for example, the debt ratio is 160 percent, in Greece even 200 percent. According to the budget adjustment decided by the government at the end of April, Austria will also miss the two most important Maastricht criteria this year, with a debt ratio of 80 percent and a deficit of 3.1 percent of GDP.