LUXEMBOURG, 16 June. (EUROPA PRESS) –
The director of the International Monetary Fund (IMF), Kristalina Georgieva, has affirmed this Friday that the legislative proposal of the European Commission for the reform of fiscal rules can promote “adequately” a fiscal adjustment in the medium term and considers it “vital” that reach an agreement soon so that the new framework can guide fiscal policies from 2025.
“A rapid agreement on the reform of the economic and fiscal governance of the EU is a priority given the fiscal challenges in the medium term,” says the IMF report published this Friday on the margins of the meeting of EU Economy and Finance Ministers which is held in Luxembourg.
The document recalls that public debt in the euro area increased “considerably” in 2020 and will remain “well above” pre-pandemic forecasts.
Likewise, he admits that basing himself on net primary spending – the reference that will replace the structural deficit – as an operational objective, “simplifies” the framework and allows the operation of countercyclical automatic stabilizers, although he believes it is essential to apply the framework with “caution”.
On the other hand, although he points out that the possibility of extending the adjustment periods in exchange for reforms that promote growth and investment is “positive”, he warns that we must avoid relying on “overly optimistic” growth estimates.
In this context, he points out that an Independent European Fiscal Board can add “credibility” to this process, while the fiscal capacity at EU level for macroeconomic stabilization and the provision of public goods will also strengthen the framework.
