BRUSSELS (Reuters) – The European Commission is expected to propose on Wednesday to European Union governments to set their own debt reduction targets when they prepare their draft budgets for 2024, an EU official said.
The Commission will publish its fiscal policy guidelines for 2024 on Wednesday to help coordinate the fiscal policies of the 27 member states, as the European Central Bank scrambles to curb record inflation.
Until the COVID-19 pandemic, in 2020, each State whose debt exceeded 60% of gross domestic product (GDP) was required to reduce each year by one twentieth the gap between this ceiling and its debt/GDP ratio. .
However, this rule was suspended during the pandemic and then again in 2022 due to the economic shock caused by the Russian invasion of Ukraine.
The large differences in the level of indebtedness between countries currently make it unrealistic to apply the common rules uniformly throughout the Union.
The rules applying to all should nevertheless be applied again in 2024. However, EU governments want to see them evolve so that they reflect the challenges posed by the increase in public debt and the investment needs, necessary after the coronavirus pandemic and to fight climate change.
The Commission should propose that states set their own targets for now, until a solution is found later in the year, said a European official familiar with the matter.
(Report Jan Strupczewski; Camille Raynaud)
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