In a more restrictive fiscal stance for 2024, notably through the phasing out of energy support measuresagreed today the Eurogroupin view of the preparation of next year’s national budgets.

“We are at a turning point for our public finances, after 7 years of expansionary policy,” said Eurogroup President Pascal Donahue. But this necessary expansionary policy, due to the effects of many shocks, also created high debts that eurozone countries must now begin to address, he added. As noted in the Eurogroup statement, Pascal Donahue stressed for the 2024 fiscal policy that the aim is to pursue “a gradual and realistic fiscal consolidation” that also includes reforms and at the same time allows for increased investment, both through public and private sources and the Recovery and Resilience Facility and other EU mechanisms.

THE Economy Commissioner, Paolo Gentiloni, expressed satisfaction that the Eurogroup’s statement is in line with the fiscal recommendations presented by the Commission in May. He stressed that the expansionary fiscal stance of the past three years, combined with the ECB’s monetary policy, had been instrumental in supporting the eurozone economy against the shocks of the pandemic and Russia’s war of aggression against Ukraine, including an increase in values ​​of the energy this caused. However, he stressed that as the Eurozone economies continue to face a still high – albeit decreasing – inflation, increased public debt and higher interest rates, “a more restrictive fiscal stance is required next year, in particular through the phasing out of energy support measures.” P. Gentiloni noted that there is “very broad agreement” on this. “In part, this is about ensuring that fiscal policy continues to work alongside monetary policy over the next period,” it said.

Regarding the Commission’s country-specific recommendations, P. Gentiloni said they were calibrated to chart a path towards achieving the above objective, while pursuing the critical investments needed in priority areas such as the green and digital transition.

In conclusion, Mr Finance Commissioner stressed the importance of reaching a good deal by the end of the year on the reform of the fiscal rules, saying that this timing is key to enable the new rules to be implemented in time to prepare national budgets for 2025. “We need a stable, reliable, predictable framework to support sustainable growth and stability in Europe. Achieving this agreement in the fall must be our common priority,” said P. Gentiloni.