Eurogroup: strong recovery but the crisis is not over, ready support for the economy in 2022

• Eurogroup, Gentiloni: "Different ideas between ministers on the Stability Pact"

• Eurogroup, Le Maire: "The debt rule at 60% of GDP is obsolete, it must be changed"

• Eurogroup.

  Lagarde: "Economy better than expected but not out of the tunnel yet"

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06 December 2021 Many topics were addressed during the session of today's Eurogroup. The summary of the work carried out at the meeting is that

however in a differentiated way, taking into account the risks for the sustainability of public finances and to return to prudent budgetary positions, when economic conditions allow it. 

"The level of uncertainty is particularly high, the risks are substantial and new headwinds are blowing for the economic outlook." This is what the Eurogroup said at the end of the informal meeting of the ministers of the member states of the Euro zone, while noting that the recovery, so far, has been strong but has "gone hand in hand with an increase in inflationary pressures, also due to energy prices, after years of contained inflation in the Euro area ".

Eurogroup reports

in global supply chains and the availability of raw materials and production inputs",

in some sectors that are also influencing the dynamics on the supply side. "Although the uncertainty about the outlook for inflation has increased, the Eurogroup recognizes the opinion of the institutions that the increase in inflation should be transitory and

."

The political green light for the budget programs of the states for 2022, however, was there. With regard to

, the Eurogroup pointed out that it is

.

In fact, the document agreed to the Eurogroup affirms that precisely those countries with high debt "in which the growth of current expenditure financed at the national level is not planned to be sufficiently limited, are invited to take the necessary measures within the budget process. national".

Even the European Commission had already explained how no government was asked to take corrective measures, but to take seriously the

problem of

limitation of current expenditure

as a specific objective in the continuation of the management of public accounts. The Eurogroup, therefore, "agrees that countries with low or medium public debts should continue an expansionary budget line in 2022, while states with high public debts should use the 

to finance additional investments to support the recovery," while pursuing prudent fiscal policies ". That's when he reported the Eurogroup communiqué released at the end of the meetings, and partly read by President

.

At the end of the Eurogroup

, European Commissioner for Economy, represented how: "The Euro area is recovering, but headwinds are increasing, also due to the pandemic" and therefore "an agile and ready response to the evolution of the situation is needed" . "Of course we know that this crisis is not over yet. Both old and new risks are materializing, especially the growing number of cases and the reintroduction of restrictions, disruptions in global supply chains and rising inflation. exactly why we, as policy makers, need to remain agile and ready to personalize our response as the situation evolves. " "As recognized by the Fund,our strong and well-coordinated political response was key to limiting the economic fallout of the pandemic in Europe, which was far less pronounced than initially feared, "added the Commissioner." An important discussion with the International Monetary Fund on the prospects of the European economy, within the global situation and we are all convinced that the positive growth prospects face some risks, especially linked to the pandemic "concluded Gentiloni.within the global situation and we are all convinced that the growth prospects, positive, face some risks, especially linked to the pandemic "concluded Gentiloni.within the global situation and we are all convinced that the growth prospects, positive, face some risks, especially linked to the pandemic "concluded Gentiloni.

Undoubtedly at the Eurogroup there was an important discussion with the International Monetary Fund on the prospects of the European economy and

came from the

. Furthermore, the Pnrr was positively evaluated, but it is essential that

in the medium term, current expenditure is sustainable. 

, director general of the International Monetary Fund, answering a question in the press conference after the Eurogroup said: "Congratulations to Italy for having achieved this level of strong growth" and for "the reforms and investments" included in the Plan National Recovery and Resilience.

"The only observation" on the Dpb Budget Planning Document that comes from the Monetary Fund - he added - is the "growth of current expenditure".

While not "a bad thing" in the short term, the IMF's call is "that it be sustainable in the short term."