The stability pact could also remain frozen in 2023, but budgetary rules or not, countries with high debt such as Italy are invited to start reducing public spending and putting their accounts in order starting from 1 January next, for the asset of the Eurozone. The European Commission warns against the risks associated with the war in Ukraine, which risk completely redesigning common guidelines and policies, but which must not detract from commitments at national level.
In the communication addressed to the States it is clarified that the EU executive remains of the opinion that the stability pact should remain suspended only until the end of the current year, “while remaining ready to react to the changing economic situation”. The entire work system up to now was based solely on the health crisis, to which in the meantime the Russian-Ukrainian one has been added. “This crisis risks having a negative impact on growth, including through repercussions on financial markets, further pressures on energy prices, persistent bottlenecks in the supply chain and effects on confidence.”
For this reason, the Commission is giving itself a few months to return to the issue of common rules. The decisions will be taken on the occasion of the presentation of the spring economic forecasts, expected for the beginning of May.
This does not mean a loophole. “At unchanged policiesx, the EU’s public debt-to-GDP ratio would stabilize substantially ‘over the next ten years’, but would remain on an increasing path in several high-debt Member States. Italy is called into question, without mentioning it. The country is and remains under special surveillance. Here the risks associated with rising public debt are compounded by other challenges, including the anticipated costs of aging populations and contingent liabilities (in the form of guarantees) granted during the COVID-19 crisis. A very tricolor identikit.
We must act “taking into account the size of the euro area and the EU”. Translated: contagion risks are feared. Failure to reduce medium-term debt in high-debt countries would weigh on growth prospects and deepen divergences between countries. Therefore, also in the light of the renewed uncertainties, it is “appropriate” to start a gradual budget adjustment to reduce the high public debt “starting from 2023”. Draghi is warned.