EU to reimpose strict fiscal rules in 2023, commission says

European Union (EU) member states have another 18 months to borrow and spend freely but should slowly get ready for the reintroduction of the bloc’s normal budgetary rules in 2023, according to an official of the bloc.

Vice President of the commission Valdis Dombrovskis who disclosed this on Wednesday, said, “We can confirm that based on our spring forecast the general escape clause will stay activated in 2022, but no longer so as of 2023.’’

All 27 member states’ economies were expected to return to pre-Coronavirus crisis level by the end of next year, the bloc’s top economic official said, presenting the commission’s latest package of economic advice.

However, EU capitals must in the meantime maintain supportive economic measures that help tackle unemployment or business insolvencies, Dombrovskis said.

Earlier in  March, the European Commission triggered the bloc’s general escape clause for the first time in its history as member states reeled from far-reaching lockdowns to prevent the spread of the Coronavirus.

Under the rules of the stability and growth pact, government deficits should stay within 3 percent of GDP while debt should not rise above 60 per cent of GDP.

Even in economic crises, member states should show they are trying to reach those targets.

The rules were tightened in the wake of the financial crisis that hit Europe in 2009.