Brussels (Brussels Morning Newspaper) – The European Commission said in a recommendation that Eurozone nations should seek slight fiscal tightening not only in 2025 but also in 2026 to enhance debt sustainability.
The recommendation to narrow fiscal policy in the 20 nations sharing the euro, after huge public spending in backing of the economy during the COVID pandemic and the energy situation, has so far been only for 2025. The European Commission, which is in charge of implementing the EU’s new debt and deficit controls, stated that if eurozone countries stick to the consented net spending programs, it should deliver a slight fiscal tightening next year and in 2026.
“(The Council recommends that eurozone countries take action) to ensure adherence with the new fiscal framework and enhance debt sustainability, uphold the national growth rates in net expenditure in each Member nation as suggested by the EU Council,” the declaration drafted by the Commission for the ministers expressed.
“This should deliver appropriately differentiated fiscal adjustments and an overall slightly contractionary euro area fiscal stance in 2025 and 2026,” it stated.
The EU Commission is also charged with observing the economies of all 27 EU nations to point out inequalities that might be building up which could then generate an economic concern that would influence others in the EU. The European Union executive stated it would undertake in-depth examinations of the economies of Italy, Hungary, Greece, Cyprus, Slovakia, Romania, Sweden, Estonia, the Netherlands, and Germany because of inequalities in these countries identified this year.
