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EU extends budget rule suspension because of Ukraine war
Brussels prolonging a pandemic-era reprieve
23 May, 15:30
(ANSA-AFP) - BRUSSELS, MAY 23 - The European Union on Monday
extended through 2023 its suspension of rules against
overspending by the bloc's governments, prolonging a
pandemic-era reprieve because of Russia's war in Ukraine.
"Heightened uncertainty and strong downside risks to the economic outlook in the context of war in Ukraine, unprecedented energy price hikes and continued supply chain disturbances warrant the extension," the EU's executive, the European Commission, said. The EU suspended the public spending rules for national governments in March 2020 as the 27-nation bloc sank into its deepest recession since World War II because of Covid-19 restrictions. Known as the Stability and Growth Pact, the EU rules limit deficit spending to three percent of a country's overall economy and debt to 60 percent. The pact was supposed to be reactivated on January 1, 2023, with the return of solid growth but Russia's invasion of Ukraine has changed the situation. (ANSA-AFP).
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"Heightened uncertainty and strong downside risks to the economic outlook in the context of war in Ukraine, unprecedented energy price hikes and continued supply chain disturbances warrant the extension," the EU's executive, the European Commission, said. The EU suspended the public spending rules for national governments in March 2020 as the 27-nation bloc sank into its deepest recession since World War II because of Covid-19 restrictions. Known as the Stability and Growth Pact, the EU rules limit deficit spending to three percent of a country's overall economy and debt to 60 percent. The pact was supposed to be reactivated on January 1, 2023, with the return of solid growth but Russia's invasion of Ukraine has changed the situation. (ANSA-AFP).
