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MNI BRIEF: Eurogroup Move Toward Restrictive Fiscal Stance

(MNI) Brussels
(MNI) Brussels

Ahead of Key meeting Monday, eurozone finance ministers seen shifting to calls for a more restrictive fiscal policy.

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Euro Area finance ministers are moving in the direction of calling for a restrictive fiscal stance, in light of sticky core inflation trends and the need to support the ECB’s tighter monetary policy, a senior EU official said Friday.

Asked if euro zone governments needed to adopt restrictive fiscal policies rather than the mere avoidance of broad fiscal stimulus, as advised by the EU Commission in its 2024 fiscal guidance earlier this week, the official replied: “I share your conclusions that this is the direction in which we are moving.” The official noted that euro zone labour markets remain “quite resilient” even while the growth outlook looked subdued and that core inflation is still trending upwards.

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Euro Area finance ministers are moving in the direction of calling for a restrictive fiscal stance, in light of sticky core inflation trends and the need to support the ECB’s tighter monetary policy, a senior EU official said Friday.

Asked if euro zone governments needed to adopt restrictive fiscal policies rather than the mere avoidance of broad fiscal stimulus, as advised by the EU Commission in its 2024 fiscal guidance earlier this week, the official replied: “I share your conclusions that this is the direction in which we are moving.” The official noted that euro zone labour markets remain “quite resilient” even while the growth outlook looked subdued and that core inflation is still trending upwards.

Keep reading...Show less