MNI BRIEF: EU Gentiloni: Brussels To Reopen EDP Next Spring

European Union Economy Commissioner Paolo Gentiloni has called on member states to wind down energy-related spending by the end of 2023 and says it will reopen excessive deficit procedures in the Spring of 2024 based on states’ 2023 budget outturns. Speaking after the release of the Commission’s annual fiscal guidance for 2023 and 2024 draft budgets, Gentiloni called for a “consistent fiscal and monetary policy mix to facilitate the task of reigning in inflation.”

With the general escape clause from the EU’s fiscal rules no longer in operation in 2024, the Commission has returned to quantified and differentiated fiscal recommendations for the first time since 2019.

The Commission said its latest policy recommendations are in line with existing EU rules, although they take into account those elements of its recent reform proposals where these are consistent with the current rules. Gentiloni said that next year’s policy recommendations would be made on the basis of the new rules if EU states can reach a deal by the end of 2023.

Government deficits in Bulgaria, Germany, Estonia, Slovenia and Slovakia are expected to exceed 3% of GDP in 2023. In France, Italy and Finland, the general government gross debt did not respect the debt reduction benchmark in 2022, potentially exposing these countries to the risk of an EDP on the basis of the debt criterion.