International Monetary Fund (IMF)

believes that the debate on whether or not to return to

fiscal rules

in the European Union is more timely than ever, now that the continent is going through a "

second economic crisis

" due to the war in Ukraine after a first derived from the pandemic from which we have not yet recovered.

As Gita Gopinath, deputy director general of the IMF, claimed on Monday during her participation in the Brussels Economic Forum in the community capital,

the new fiscal rules

that will come into force when the

escape clause of

the Stability and Growth Pact is deactivated "will have They

must be


they must seek

balance in the medium term

depending on the levels of public debt in each country and they must allow for

more autonomy at the national level".

The institution headed by

Kristalina Georgieva

has recalled that now many countries will have to assume important investments and expenses, for which reason it has especially recommended those with

high levels of

public debt to present a

medium-term fiscal consolidation plan.

“There is a lot of spending on the agenda and given that we live in a world that has suffered an economic shock, it is important

that countries have solid fiscal plans

in the medium term that

demonstrate that they will return to reasonable spending levels

after the crisis and in this sense the debate on fiscal rules is very important and must be assessed in the current context in which debt levels are very high", he claimed.


, with a

public debt

of 118.4% of GDP at the end of 2021, which is expected to fall to 115.1% this year, according to the economic forecasts of the European Commission, is one of the countries that has repeatedly been asked prepare a



fiscal consolidation plan .


Bank of Spain

and the Independent Authority for Fiscal Responsibility (


) are among the institutions that have advised it, but the

Ministry of Finance

has always argued that it was not the right time to tackle this task.

Paolo Gentiloni,

Commissioner for Economic Affairs, agreed with the IMF spokesperson that the new fiscal rules must ensure a "

gradual reduction of debt without interrupting growth

", improve the level of responsibility of each country and be simpler.

"The Next Generation


can be an example to look at, because it is a method in which we have the decision-making capacity of the countries in each plan, a lot of negotiation between the countries and the Commission and then implementation and control by the Commission. This This


can be useful for fiscal policy in the medium term

, making debt reduction more real than it is on paper. This is the challenge, but I am pleased that the IMF sees that the solution is not so easy, because finding consensus It's difficult," said the commissioner.

However, he has defended that "knowing the challenges that must be faced is part of the solution" and has celebrated that they have "progressed a lot in the debate".

In fact, he recalled that a few weeks ago countries "as different" as

Spain and the Netherlands presented a joint proposal

to reform these rules.

Specifically, they defended the creation of "country-specific consolidation strategies that are realistic, gradual, but ambitious and compatible with economic growth and job creation, inspired by the governance of the Next Generation EU instruments".

green transition

The spokesmen for the IMF and the European Commission have also addressed the problem of the

costs associated with the ecological transition

and the extraordinary cost of moving from the use of fossil fuels to clean energy.

In this sense, Gentiloni has assured that

the EU "cannot postpone" this transition


"The EU must first ask itself how it is going to behave in this situation, because we could respond with the idea that we live in difficult times, we have to face the independence of Russian gas and oil, so we can postpone the ecological transition and return in a few years. I think that would be a mistake. The role that the EU should have in this process is one of leadership", he defended.

He has argued that border carbon adjustments may initially be seen as a policy against other countries, but he believes it will gradually be seen as a benchmark.

Regarding the financing of this ecological transition, he has estimated

the investments that the EU needs at 500,000 million euros.

In this regard, the director of the IMF has asked that

private investments

be promoted , since "the scale of investments that is needed is much higher than the public money that can be contributed".

Impact of the pandemic

Both leaders have agreed that Russia's invasion of Ukraine will have

negative consequences

for the world economy.

"What we are facing now is

a second black swan in two years,

we expected in January that there would be a good evolution of the economy but the war increased some headwinds that we already had last year and now we are facing challenges. The war is first a humanitarian problem, we cannot look only at the economy. But at the economic level we are reacting as one in the EU", he defended.

The former Italian prime minister has insisted that, although the war will have consequences, the EU cannot evade its responsibility and its ambitions.


Growth is falling and we have the highest level of inflation

we have ever had with the single currency, but those challenges should not change the ambition of the EU. The lesson we have learned in recent years is that we need energy independence and a defense common and we must analyze how to manage this all together".

Regarding the measures that countries are adopting to alleviate the impact of the war, he is not in favor of a fiscal policy of universal support such as the one implemented during the pandemic, but instead is

committed to granular measures

, focused on the weakest and above all temporary. .


Governments now have to be more selective

and I am not saying this because I am worried about the sustainability of the debt, because the financing conditions will continue to be favorable and even negative for a long time, but with the inflation that we have we need to be much more selective and this is what we will suggest to the countries in the Spring Package", he stressed.

Conforms to The Trust Project criteria

Know more

  • IMF

  • European Comission

  • Ukraine

  • Petroleum

  • Russia

  • GDP

  • European Union

  • Europe