EU calls for “reduce energy subsidies”
The EU Commission has published its study titled “European Spring Semester Package”, which includes recommendations on the economic situation of member countries.
In the study, all member countries were asked to maintain a sound fiscal position and implement prudent fiscal policies that limit the nominal increase in net primary expenditures.
In the study, in which member states are requested to use public supports and EU funds in a way that will especially promote green and digital transformation, it was stated that the current energy support measures should be reduced by the end of 2023.
In the study, which emphasized the importance of supporting energy savings in case of an increase in energy prices again, it was noted that these aids should aim to protect the poor and companies.
In the study, the importance of following a medium-term fiscal strategy, which includes investments and reforms conducive to sustainable growth, for a prudent medium-term fiscal position of the member countries in the period after next year, was highlighted.
In the study, it was stated that a report was prepared for 16 member countries, namely Belgium, Bulgaria, Czechia, Germany, Estonia, Spain, France, Italy, Latvia, Hungary, Malta, Austria, Poland, Slovenia, Slovakia and Finland, in order to evaluate their compliance with the public deficit and debt criteria. It was reported that the budget deficit criterion was not met by Belgium, Bulgaria, Czechia, Germany, Estonia, Spain, France, Italy, Latvia, Hungary, Malta, Poland, Slovenia and Slovakia.
Greece and Italy are extremely unbalanced
In the study, it was underlined that France, Italy and Finland did not meet the debt criteria.
In the study, it was stated that Germany, France, Spain, the Netherlands, Portugal, Romania, Sweden, Hungary and the Greek Cypriot Administration of Southern Cyprus experienced macroeconomic imbalances, while it was stated that there was “extreme imbalance” in Greece and Italy.
High inflation warning
Pointing out that the last 3 years have been very difficult for individuals and businesses in Europe, Valdis Dombrovskis, Vice President of the EU Commission, said, “Despite the recent decline in energy prices, especially high inflation, which reduces the purchasing power and competitiveness of companies. We face many challenges.” said.
Explaining that at this stage the focus should be on prudent fiscal policies, Dombrovskis emphasized the importance of identifying the best investments to support growth and making the EU more competitive.
The Stability and Growth Pact, created to ensure fiscal discipline and stability throughout the EU, aims to ensure that member countries maintain their fiscal discipline through preventive measures.
According to the Union rules, the budget deficits of the member states account for 3 percent of their gross domestic product. under The ratio of public debt stocks to gross domestic product should not exceed 60 percent.
Among the EU member states, the country with the highest public debt to GDP ratio in the last quarter of 2022 is Greece with 171.3 percent. In public debt, Greece was followed by Italy with 144.4 percent, Portugal with 113.9 percent, Spain with 113.2 percent, France with 111.6 percent and Belgium with 105.1 percent.
EU member states have implemented many measures and support programs against the rising natural gas and electricity prices with the Russia-Ukraine war and energy crisis last year. These energy subsidies place a serious burden on the public finances of the member states.