Brussels will extend the suspension of the fiscal rules until 2022 for the flare-ups

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Brussels extended until 2022 the moratorium on the application of the fiscal rules , decided last march in response to the pandemic of Covid-19, before the appearance of recurrences of the disease and the already uncertain economic outlook for the region, as confirmed by a ‘Financial Times’ the vice-president of the European Commission (EC), Valdis Dombrovskis.

In this sense, the vice-president of the European Commission has indicated that, while Brussels is planning to review the situation in the autumn, was “relatively safe to assume” that the Commission will not seek to reactivate the rules at that point “because the crisis continues, the uncertainty continues.”

In practice, this means that l I national governments will prepare their budgets for 2021 on the basis that the rules are still on hold , has been added. As a result, the first national budgets that could potentially be subject to the rules would be the 2022.

the revitalization of The escape clause depends on “when you are no longer the condition of severe economic recession” , said the Latvian. “We will have a review of this, among other things, in the spring of 2021,” he added. In this sense Dombrovskis has emphasized that the “it all depends on how you develop the economic situation-real” , since there are still “great uncertainty”.

in The past month of July, the European Commission worsened their economic forecasts for the euro area, shrink on a historical rate of 8.7% in 2020 , to grow again to 6.1% in 2021, while also revised the EU economy is expected to contract by 8.3% in 2020 and will grow at around 5.8% in 2021.

The official Latvian has been noted that such forecasts are made on the basis of a scenario in which you would not have a major resurgence of the disease , but since then there has been an increase of cases in several EU countries, including Spain, Germany and Belgium, so the current situation is relatively uncertain. “We will need to see how it develops the epidemiological situation,” he said.

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