EU finance ministers agree with the European Commission proposal to temporarily release the fiscal rules related to the corona crisis.
They agreed on this during a video conference to “pump as much as needed into the economies”.
To make this possible, a particular “escape clause” in the Stability and Growth Pact (SGP), which contains the rules, is activated.
Minister Wopke Hoekstra afterwards: “As a result, Member States now have more room to do what is necessary for the fight against the coronavirus. In these exceptional times, we must do this to minimize the damage caused by the virus.”
Ministers said in a statement that the expected severe economic blows “require a resolute, ambitious and coordinated response to keep shocked as short and limited as possible.”
Measures should prevent permanent damage to the European economy and the sustainability of public finances.
They also declare to remain “fully committed” to the pact. For example, a Member State’s budget deficit should not exceed 3 percent of gross national income (GNI) in “normal times”, and its national debt should not exceed 60 percent of GNI.
A country can be fined if it breaks the rules. Due to the unforeseen billions of expenditure to combat the crisis, the deficits and debts in the states are increasing rapidly.