Connect with us

Economy

Donohoe argues sustainability requires ‘timely, temporary and targeted’ fiscal measures

Catherine Feore

Published

on

The Eurogroup has issued a statement (15 March) on the eurozone's continuing fiscal response to the COVID-19 crisis, committing to what Eurogroup President Paschal Donohoe described as timely, temporary and targeted measures that would be key to longer-term fiscal sustainability. 

European Commissioner Paolo Gentiloni underlined his agreement with the Eurogroup statement, saying:  “We will not repeat the same mistakes of the last crisis.” Pointing to the growing consensus in Europe and internationally, he said pulling back too quickly would be a policy mistake, and argued that the best way to secure public debt sustainability is to support the recovery and thereby reduce the risk of scaring and economic divergence. 

According to the Eurogroup statement, the vigorous policy response of countries and the EU is paying off.  Far-reaching fiscal support at 8% of GDP allowed through the activation of the ‘general escape clause’ and the temporary framework for state aid has been far in excess of the response to the financial crisis. 

The group also welcomed the European Commission’s Communication of 3 March 2021 'One year since the outbreak of COVID-19: fiscal policy response', providing policy orientations for the coordination of our supportive fiscal stance. 

There is agreement that until the health crisis is over and recovery is firmly under way, European governments will continue to protect the economy through the deployment of the ‘necessary’ level of fiscal support to promote economic activity and mitigate scarring effects with the aim of protecting longer-term fiscal sustainability. 

The statement explicitly states that the premature withdrawal of fiscal support should be avoided for as long as the acute health emergency prevails. Once the health situation improves and restrictions ease, fiscal measures should gradually shift towards more targeted actions to promote a resilient and sustainable recovery. 

Viable, but still vulnerable firms will continue to be helped to avoid solvency problems, reopen and adjust their business models. However, governments should become increasingly involved in facilitating job transitions and the creation of job opportunities for unemployed and inactive persons. The responses will vary according to each state's particular circumstances. 

Finally, once recovery is ‘firmly’ under way, states will address the increased public debt levels by implementing sustainable medium-term fiscal strategies, with an emphasis on improving the quality of public finances, raising investment levels and supporting the green and digital transitions.

European Parliament

European Parliament gives partial go-ahead to UK trade deal vote

EU Reporter Correspondent

Published

on

The European Parliament gave the go-ahead on Tuesday (13 April) for two key committees to vote this week on the EU-UK trade deal, but deferred a decision on whether the full parliament will give its assent later this month, writes Philip Blenkinsop.

The vote by parliament would be a final step in clearing the trade agreement struck between Britain and the European Union in December. Members of the parliament suspended the voting process in March in protest against British changes to arrangements on Northern Ireland.

Continue Reading

Agriculture

Agriculture: Short-term outlook report favourable for EU agricultural sectors

EU Reporter Correspondent

Published

on

The Commission has published the latest short-term outlook report for EU agricultural markets. This regular publication presents a general and sector-by-sector overview of the latest tendencies and further prospects for agri-food markets. The first 2021 edition concludes that the EU agricultural sector has shown resilience throughout the COVID-19 crisis. The sector performed relatively well thanks to increased retail sales and home consumption.

In addition, prospects are favourable with a dynamic global demand and the reopening of food services (restaurants, bars, cafés) expected once the vaccination campaign is sufficiently advanced. Recent trade developments will reduce uncertainties around the EU's trade relations, benefitting agricultural sectors. Among those developments, the US and the EU have agreed to temporarily suspend tariffs related to the civil aircraft disputes early March 2021. In addition, the EU-UK Trade and Cooperation Agreement was concluded late 2020. Still, both sides will need time to adapt and provide necessary conditions for optimal trade exchanges. For full details concerning specific markets, see the news item and the report available online.

Continue Reading

EU

European Year of Rail: Hop on the Connecting Europe Express

EU Reporter Correspondent

Published

on

The Connecting Europe Express, one of the European Year of Rail 2021's most emblematic initiatives, is being presented today during the official European Year of Rail kick-off conference, organised in cooperation with the Portuguese Presidency of the Council of the EU. The event takes place on the eve of an informal meeting of EU Transport Ministers focusing on different ways to accelerate a modal shift to rail. As of September, the Connecting Europe Express will travel across the EU and stop in most European capitals to promote the many benefits of rail - for passengers, freight and the environment.  The project will also raise awareness of the importance of financing sustainable infrastructure such as rail, and EU support for such investment, including through the recently agreed new Connecting Europe Facility (CEF), worth €33.7 billion, as part of the next long-term EU budget 2021-2027. The train's journey is possible thanks to good cooperation between European rail operators and infrastructure managers. Transport Commissioner Adina Vălean said: “The Connecting Europe Express will be a real, tangible example of the power of rail to connect. At each of the almost 40 stops, events will bring together the rail sector at large, as well as civil society organisations, local and regional authorities, and the wider public, to discuss the benefits of rail, as well as what still has to be done so that rail can become the number one option for passengers and business.”

Continue Reading

Twitter

Facebook

Trending