Published on Thursday, May 13, 2021 | Updated on Thursday, May 13, 2021

Europe | Governance and fiscal sustainability in the EU

The COVID has been a great challenge, forcing to approve unprecedented measures. In Europe, monetary and fiscal stimuli prevented further economic drop but at the same time public accounts were hit. A clear budgetary plan and a suitable fiscal framework will be crucial to guarantee the sustainability of public finances.

Key points

  • Key points:
  • In 2020, the European authorities approved a broad set of fiscal and monetary stimuli to face the crisis and prevent further economic drop.
  • The huge fiscal support, although necessary, had a high budgetary cost and exacerbated the challenge of public finances sustainability in the most indebted countries.
  • As soon as the economic recovery allows it, the countries should apply a clear medium-long term budgetary strategy.
  • European fiscal rules should be revised to help countries achieve the maximum fiscal benefit.
  • Fiscal governance will be key to reach a medium-term budgetary balance.

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