EU will start rolling out tax rules next year

Valdis Dombrovskis, Senior Vice President of the European Union (EU) Commission, and Paolo Gentiloni, Member of the European Economic Commission, held a press conference in Brussels on the work of member states, including recommendations on fiscal policies for the next year.

Recalling that EU countries have provided significant support to protect citizens and businesses in the last 3 years, first in the face of the epidemic and then in the face of high energy prices, Dombrovskis said: “This support is not It can go on forever.” saying.

‘THE TIME FOR THE BROAD FINANCIAL INCENTIVE HAS EXPIRED’

Dombrovskis, noting that subsidies should be phased out as energy prices have fallen, “is past the time for broad fiscal stimulus.” he said.

Noting that the EU Commission has prepared the 2024 fiscal policy guide for member countries, Dombrovskis said: “We must now focus on improving debt sustainability and increasing potential growth in a sustainable manner.” he used the phrase.

Recalling that EU member states suspended fiscal rules and increased public spending with the exemption article in 2020, Dombrovskis stated that the decision to suspend the article will be lifted at the end of 2023.

Gentiloni said that they have approved that at the end of the year the general exemption clause, which allows unlimited public spending, be disabled.

Recalling that the general exemption clause of the Stability and Growth Pact entered into force in 2020, Gentiloni explained that it allows member countries to spend on economic problems caused by the epidemic and war.

“EU countries must follow prudent fiscal policies, protect public investments and phase out energy support measures, starting with non-specific ones,” Gentiloni said. he performed the assessment of it.

EU FINANCIAL RULES

According to EU rules, member states’ budget deficits must not exceed 3 percent of their GDP and public debt must not exceed 60 percent of their GDP under normal conditions.

When this limit is exceeded, the EU Commission must be notified of the measures to be implemented and an effective fight must be carried out. Otherwise, the disciplinary process known as the “excessive deficit procedure” may be applied to the country in question. At the end of the disciplinary process, economic sanctions are imposed on the country.

EU member states decided to suspend the rules due to the epidemic and energy crisis and increased their public spending. (AA)