The EU Ministers of Finance agree with the Commission’s proposal to activate the fiscal framework’s general escape clause in response to COVID-19.
On 23rd March, the EU Ministers of Finance agreed with the Commission’s proposal to activate the general escape clause of the Stability and Growth Pact (SGP). The escape clause has never been activated since its addition to the SGP in 2011 following the preceding years of economic crisis. The clause allows for temporary deviation, without endangering fiscal sustainability, from the normal requirements for all Member States to pursue fiscal policy in a situation of generalised crisis caused by a severe economic downturn of the euro area or the EU as a whole. The Commission, now endorsed by Council, considers that the COVID-19 pandemic qualifies as an “unusual event outside the control of government” and that the conditions to activate the general escape clause are fulfilled.
Whilst remaining committed to respect the STP, Member States will be allowed to undertake measures to deal adequately with the crisis, while departing from the budgetary requirements that would normally apply under the European fiscal framework.
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