MNI INTERVIEW: Little Appetite For Eurozone Fiscal Stimulus

By David Thomas

     BRUSSELS(MNI) - There is little appetite among eurozone governments for

greater fiscal stimulus despite mediocre growth data, European Fiscal Board

Chair Niels Thygesen told MNI.

     The overall fiscal policy stance of the euro bloc is currently neutral to

slightly stimulative by around 0.4% to 0.5% of GDP, and this remains

appropriate, Thygesen said in an interview.

     "The estimated expansionary stance of fiscal policies in 2020 seems a

broadly shared view (among forecasters and the European Commission). Combined

with a slight pick-up in an admittedly modest rate of overall expansion next

year, most governments to not see a general case for providing more of a demand

stimulus."

     The European Fiscal Board is an independent advisory body of the European

Commission, with a brief to evaluate and make recommendations on the European

Union's fiscal framework.

     While downside risks to eurozone growth in 2020 persist, Thygesen said that

until these actually crystallise governments will not adjust their current

fiscal plans.

     Thygesen noted, however, a growing focus on "the quality of public

finance".

     "Most governments now interpret (this) as assuring that growth-enhancing

expenditures and green investment should be given a higher priority."

--MNI London Bureau; +44 203 865 3829; email: jason.webb@marketnews.com

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