|
The
19-country euro zone has for years stuck to a "broadly neutral"
fiscal policy in its annual recommendations, despite repeated
calls from the European Central Bank and slow-growth states for
it to invest more.
But weak growth last year in Germany, the bloc's largest
economy, and fears of a new downturn, fueled by the coronavirus
outbreak in China, are pushing Berlin to soften its stance.
Until now it has preached austerity to reduce fiscal imbalances
in high-debt countries, like Italy and Greece.
"If downside risks were to materialize, fiscal responses should
be differentiated, aiming for a more supportive stance at the
aggregate level," a European Union document says, confirming a
Reuters report earlier in February.
Euro zone finance ministers will discuss the document in
Brussels later on Monday, according to the meeting's agenda, and
are expected to adopt it on Tuesday, EU officials said.
The text stresses that higher spending would need to comply with
EU fiscal, rules which mandate deficits below 3% of gross
domestic product, among other requirements. It is also not clear
how the euro zone defines a downturn that would trigger more
expansionary policies.
The ultimate decision on turning this recommendation into more
spending lies entirely with national governments. Germany's
Finance Minister Olaf Scholz has said in past months Germany
would spend more during an economic crisis, but despite last
year's slowdown it has posted large budget surpluses in the
first nine months, Eurostat figures released in January show.
(Reporting by Francesco Guarascio; editing by Larry King @fraguarascio)
[© 2020 Thomson Reuters. All rights
reserved.] Copyright 2020 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.
|
|
