MNI: Some EU States Should Limit Current Spending: Gentiloni

EU Economic Affairs Commissioner Paolo Gentiloni said Wednesday that high-debt member states should limit growth in current spending and prioritise public and private investment next year.

Gentiloni made the comments during a press conference, launching the Commission's annual policy guidance to EU states in which the EC confirmed its decision to extend the Escape Clause from its limits on states' budget deficits and debt until the end of 2022. While the overall EU fiscal stance "should remain supportive in both 2021 and 2022", he said high-debt states should limit growth in current spending as of next year.

"… in 2022, fiscal policies should become more differentiated, taking into account the state of the recovery, fiscal sustainability and the need to reduce economic, social and territorial divergences," he said..

"Those with high debt should limit the growth of current expenditure. Because it's one thing if public finances are used for current expenditures; it's another if they used to invest in research, education and public infrastructures," he added.

For the period beyond 2022, the commissioner said that all states should pursue prudent fiscal policies when economic conditions allow.
"When economic conditions allow, Member States should pursue a fiscal policy aimed at achieving prudent medium-term fiscal positions and ensuring fiscal sustainability in the medium term."