An assessment of the euro area fiscal stance since the pandemic

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Authors and Corporations:

Cepparulo, Alessandra (Author), McDonnell, Clíona (Author), Reitano, Vito Ernesto (Author)

Other Authors:

McDonnell, Clíona [Author] • Reitano, Vito Ernesto [Author]

Type of Resource:

E-Book

Language:

English

published:

Luxembourg Publications Office of the European Union 2024

Series:

European economy ; 080 (July 2024)

Subjects:

Fiscal policy coordination

fiscal rules

fiscal stance

business cycles

automatic stabilisers

fiscal forecast

sovereign debt sustainability

inflation

euro area

EU budget

national budget

economic recovery

community resilience

fiscal policy

budget estimate

economic policy

Graue Literatur

Source:

Verbunddaten SWB
Lizenzfreie Online-Ressourcen

ISBN:

9789268125366

License:

Non-commercial reproduction authorised, subject to acknowledgement of the source. For any use or reproduction of photos which are not under European Union copyright, permission must be sought directly from the copyright holder(s)

Description
Summary:	This Economic Brief analyses the euro area fiscal stance since 2020, i.e. the impulse that national budgets and the EU budget have been providing to the euro area economy since the pandemic. Overall, the euro area fiscal stance was highly supportive in 2020-2023, during the COVID-19 and the energy crises, while it is forecast to turn contractionary in 2024 and, under unchanged policies, neutral in 2025. The fiscal stance estimates are based on the Commission 2024 spring forecast. For 2025, in an alternative to the no-policy-change forecast, illustrative results are also presented, assuming that Member States will follow a fiscal adjustment needed to keep their public debt on a sustainable path and bring or keep deficit below the reference value, as defined in the context of the new EU fiscal framework. Under this 'normative approach', the euro area fiscal stance would be contractionary in 2025, ranging from around ¼ % to around ½ % of GDP. Such a contractionary fiscal stance is considered to be broadly appropriate, from a debt sustainability standpoint but also with a view to supporting monetary policy in lowering inflation. The fiscal stance factors in the impulse from the EU budget, which currently includes the Recovery and Resilience Facility, created in the wake of the pandemic to support the recovery of the EU economy through high quality spending and reforms.
Physical Description:	1 Online-Ressource (circa 20 Seiten)
ISBN:	9789268125366
DOI:	10.2765/555052
Access:	Open Access