MNI BRIEF: Fiscal Support For Demand Unwarranted - Eurogroup

Supporting overall demand by fiscal policy in the eurozone would not be warranted next year, the Eurogroup of finance minister said in a statement Monday. Instead, fiscal policy should support the ECB’s fight to control inflation, the statement says.

“Fiscal policies in all countries should aim at preserving debt sustainability, as well as raising the growth potential in a sustainable manner to enhance the recovery, thus also facilitating the task of monetary policy to ensure price stability by not adding inflationary pressures.” the statement says.

The statement calls on member states to differentiate their policies according to their fiscal and economic situation, including their exposure to the crisis and the inflow of refugees. Addressing supply side constraints, implementing structural reforms and supporting investment in the green, digital and energy security should also be priorities for fiscal policy.