The finance ministers of the eurozone who met today Thursday in Brussels (Eurogroup), with a statement they welcome the fact that the draft budget of Greece and six other eurozone countries (Cyprus, Estonia, Spain, Ireland, Lithuania, Slovenia), Ireland, Lithuania and Slovenia are in line with the Council’s budgetary recommendations, based on the Commission’s assessment.

The Eurogroup notes that the draft budgets of Austria, Germany, Italy, Luxembourg, Latvia, Malta, the Netherlands, Portugal and Slovakia are broadly aligned with the Council’s budgetary recommendations and calls on these Member States to be ready to take action as required. It also notes Germany’s announcement that adjustments to its fiscal plans may be needed.

The Eurogroup notes that, based on the Commission’s assessment, the draft budgets of Belgium, Finland, France and Croatia are at risk of falling out of line with the Council’s fiscal recommendation. It is noted, however, that fiscal policy in Belgium and France is expected to be contractionary. The Eurogroup calls on these Member States to consider in a timely manner and as necessary take measures to address the risks identified by the Commission to ensure that fiscal policy is in line with the recommendations adopted by the Council and welcomes their commitment to monitoring required.

The finance ministers of the euro zone emphasize that “further tightening of fiscal orientation of the euro area is expected for 2024, after most energy support measures are phased out” and noted that the potential size of the contractionary effect could be affected by possible measures taken by Germany in response to its Constitutional Court ruling.

“While policies should remain flexible in the face of prevailing uncertainty, ean overall restrictive fiscal stance is indicated in the euro area by 2024 in order to strengthen the sustainability of public finances and avoid fueling inflationary pressures”, the euro area ministers stress, while welcoming the fact that investment is expected to increase in the euro area and underlining the importance of effective absorption of the resources of the Recovery and Resilience Mechanism and other EU funds.

The Eurogroup “welcomes the fact that most euro area member states are planning to end energy support measuresin the absence of new energy price shocks and call on Member States expected to have significant measures still in place to phase them out as soon as possible in 2024. Member States should use the relevant savings to reduce government deficits” .

It also notes the Commission’s intention to propose to the Council the opening of deficit-based excessive deficit procedures in spring 2024 and encourages Member States with deficits above 3% of GDP to take the necessary measures.