The European Commission is considering a new suspension of the Stability and Growth Pact justified for all of 2023: “Increased uncertainty and strong downside risks to the economic outlook in the context of the war in Ukraine, unprecedented energy price hikes and continued supply chain disturbances warrant the extension of the general escape clause” which suspends the pact’s obligations “through 2023”, the European Commission said in recommendations in the spring package of the European semester. The clause will be deactivated “as of 2024”.
“The activation of the general escape clause” – the suspension of rules – “through 2023 will guarantee enough space for national budget policies to react promptly when necessary, guaranteeing at the same time a gradual transition from the wide support of the economy implemented throughout the pandemic towards growing attention to temporary and targeted measures and budget caution necessary to guarantee mid-term sustainability,” Brussels wrote.
The European Commission will provide orientations on the possible reform of the entire economic governance framework after the summer break and in useful time for 2023.
