Southern Europe calls for fiscal rules to secure recovery

The depth of the reform of the Stability and Growth Pact for the post-Covid era marks the first two EU economic meetings.

EUROGROUP Meeting 17-18 January 2022

Eurozone finance ministers (Eurogroup) kicked off their 2022 meetings on Monday 17 with a new debate on the future of the common currency’s economic governance, which includes the review of fiscal rules, with the focus on elements such as the budget plans that capitals have to send to Brussels each year and their surveillance.

The main conclusions on the topics discussed were:

Economic adjustment and resilience

The Eurogroup had a thematic discussion on economic adjustment and resilience in terms of recent performance of the euro area compared to international peers, based on input from the European Commission

Autumn 2021 Economic Forecast for Spain and the EU Read more

Corporate vulnerability and structural developments post Covid-19

Ministers had a thematic discussion on the solvency situation of the corporate sector and potential measures to facilitate the corporate restructuring and economic adjustment in the euro area in the recovery after the global COVID-19 pandemic.

2022 euro area recommendation

Ministers discussed the draft recommendation on the economic policy of the euro area for 2022. The draft recommendation will be approved at the ECOFIN meeting on 18 January 2022 and endorsed by the March European Council. Its final adoption is expected at a subsequent ECOFIN meeting.

More information : European Council

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Main conclusions of the Economic and Financial Affairs Council (ECOFIN) meeting of 18 January 2022:

The first debate of the ministers of economy and finance of the European Union (Ecofin) served to confirm the division of the member states over the reform of the Stability and Growth Pact. The rules limiting public deficit and debt have been suspended since the start of the pandemic, but Brussels’ intention is to reintroduce them in 2023. However, the pact will need to address changes to cope with the post-pandemic phase and the differences between countries lie in the depth of these reforms.

Corporate taxation

Ministers held a policy debate on the proposed Council directive on ensuring a global minimum level of taxation for multinational groups in the Union. This comes after the Commission tabled its proposal for a directive at the end of December.

Taxation of multinational companies Read more

In their interventions, ministers confirmed the priority nature of this dossier and the need to transpose the agreed rules on international business taxation as soon as possible.

Economic recovery

Economy and finance ministers discussed the state of play regarding the implementation of the Recovery and Resilience Facility (RRF).

Recovery Fund: the EU honours its commitments Read more

At this stage, Commission assessments of Recovery and Resilience Plans (RRPs) for five member states are still pending. One of these five member states still needs to submit its RRP. The Council has acted swiftly on the Commission proposals and adopted Council implementing decisions approving assessments of 22 plans within the tight timeframe set in the regulation. The Commission is in discussions with Bulgaria, Hungary, Poland and Sweden on the assessment of their RRPs.

European Semester 2022

Economic and financial affairs ministers adopted conclusions on the 2022 Alert Mechanism Report and the 2022 Annual Growth Survey, launching the annual European Semester cycle to monitor member states’ economic, budgetary, employment and social policies.

European Semester Autumn Package 2021 Read more

They also approved the 2022 recommendation on the euro area economic policy (EER). The EERP will be submitted for endorsement to the European Council in March 2022 before it can be adopted by the Council at a forthcoming Ecofin meeting.

More information : European Council