The EU calls on member states to ‘reduce their energy subsidies’
The European Union (EU) Commission has asked member states to comply with the union’s financial rules and reduce current energy support measures by the end of this year.
The EU Commission has published its study entitled “European Spring Semester Package”, which includes recommendations on the economic situation of member countries.
In the study, all member countries were asked to maintain a strong fiscal position and implement prudent fiscal policies that limit the nominal increase in net primary expenditures.
In the study, which calls on member states to use public support and EU funds in a way that especially promotes the green and digital transformation, it was stated that current energy support measures should be reduced for the purposes of 2023.
In the study, which emphasized the importance of supporting energy savings in the event of a new increase in energy prices, it was noted that these aids should aim to protect the poor and businesses.
The study highlighted the importance of following a medium-term fiscal strategy, including investments and reforms conducive to sustainable growth, for a prudent medium-term fiscal position of member countries in the period after next year.
GREECE AND ITALY Extremely unbalanced
In the study, it was indicated that a report was prepared for 16 member countries, namely Belgium, Bulgaria, Czech Republic, Germany, Estonia, Spain, France, Italy, Latvia, Hungary, Malta, Austria, Poland, Slovenia, Slovakia and Finland. . in order to assess its compliance with the deficit and public debt criteria. It was reported that Belgium, Bulgaria, the Czech Republic, Germany, Estonia, Spain, France, Italy, Latvia, Hungary, Malta, Poland, did not meet the budget deficit criterion. Slovenia and Slovakia.
In the study, it was highlighted that France, Italy and Finland did not meet the indebtedness criteria.
In the study, it was claimed that France, Germany, the Netherlands, Portugal, Romania, Spain, Sweden, Hungary and the Greek Cypriot Administration of Southern Cyprus experienced macroeconomic imbalances, while it was claimed that there was “extreme imbalance” in Greece and Italy.
HIGH INFLATION WARNING
Noting that the last 3 years have been very difficult for people and businesses in Europe, Valdis Dombrovskis, Vice President of the EU Commission, told a press conference in Brussels: “Despite the recent drop in prices of energy, especially high inflation, which reduces the purchasing power and competitiveness of companies “We are facing many challenges,” he said.
Explaining that at this stage the focus should be on prudent fiscal policies, Dombrovskis stressed the importance of identifying the best investments to support growth and make the EU more competitive.
The Stability and Growth Pact, created to ensure fiscal discipline and stability across the EU, aims to ensure that member countries maintain their fiscal discipline through preventive measures.
According to the rules of the Union, the budget deficits of the member states must be less than 3 percent of their gross domestic product, and the ratio between the balances of public debt and their gross domestic product must not exceed 60 percent. hundred.
Among the EU member states, the country with the highest public debt in relation to GDP in the last quarter of 2022 is Greece with 171.3 percent. In public debt, Greece was followed by Italy with 144.4 percent, Portugal with 113.9 percent, Spain with 113.2 percent, France with 111.6 percent and Belgium with 105.1 percent.
EU member states have implemented many support measures and programs against rising natural gas and electricity prices with the war and energy crisis between Russia and Ukraine last year. These energy subsidies place a serious burden on the public finances of member states. (AA)