“In the absence of new shocks to energy prices in the euro area, we will try to reduce energy support measures, using the related savings to reduce fiscal deficits, as soon as possible in 2023 and 2024,” the Eurogroup statement said. euro zone finance ministers.

Ahead of the preparation of next year’s national budgets, the Eurogroup agreed that eurozone countries should pursue a more restrictive fiscal stance for 2024, notably through the phasing out of energy support measures.

Specifically, his entire statement Eurogroup as follows:

“The euro area economy has proven its resilience, recovering significantly from two consecutive and significant exogenous crises stemming from the Covid-19 pandemic and Russia’s war of aggression against Ukraine. Growth in 2022 was better than expected, supported by a swift, strong and coordinated policy response across the euro area, reflecting discussions in the Eurogroup. After slowing this year, growth in 2024 is expected to pick up as inflationary pressures ease. However, while uncertainty around the economic outlook has eased, it remains elevated and risks are heavily weighted to the downside. Eurozone labor markets – a source of strength to date – are set to continue to experience low unemployment and high activity rates. Despite the reduction, inflation in the euro area remains a key concern, showing divergences between member states. Core inflation is gradually declining, with core inflation being more persistent. We will continue to monitor key drivers, particularly margins and wage developments. It is important that inflation declines further and that inflation expectations remain well anchored. The Eurogroup remains concerned about the impact of inflation on the euro area economy and its consequences for our citizens and businesses.

In the period 2020-2022 the fiscal stance in the euro area was expansionary to deal with external shocks and protect our vulnerable societies. At the same time, these policies have put additional burdens on public finances. While consolidation has already begun, the impact of persistent inflation and higher borrowing costs will need to be addressed to reduce deficit and debt ratios over time.

In this light, a decisive, gradual and realistic fiscal consolidation strategy is justified, to strengthen fiscal sustainability, to rebuild fiscal buffers, to achieve higher sustainable growth, to strengthen the euro area’s resilience to future challenges. At the same time, implementing structural reforms as well as securing and increasing investment, both through public and private sources and through the Recovery and Resilience Facility (RRF) and other EU mechanisms, remains a key objective, in particular for common priorities such as green and digital transition and defense capabilities.

On 16 June, the Council agreed on country-specific fiscal recommendations for 2023 and 2024, which include recommendations for a diversified fiscal effort. In the absence of renewed energy price shocks, in the euro area we will try to reduce energy support measures, using the related savings to reduce government deficits, as soon as possible in 2023 and 2024. According to Commission estimates, for most euro area member states, this is expected to be sufficient to implement the fiscal recommendations. In line with previous Eurogroup statements, we will avoid permanent deficit-increasing measures to facilitate sustained deficit and debt reduction. We will achieve the necessary overall restrictive fiscal stance in the euro area for 2024, with the implementation of the fiscal recommendations by all euro area member states.

The Eurogroup will continue to closely monitor economic and fiscal developments regularly and adapt policy advice as necessary, including to adapt it to economic conditions. An important element of policy coordination is the revised fiscal governance framework, where work is progressing with a view to completing the legislative work in 2023. In this context, the Eurogroup will review the fiscal policies of euro area members in December, according to the Commission opinions on the draft budgets for 2024.’