Russia’s invasion of Ukraine will have a negative economic impact on Europe’s growth and the European Commission will assess by May whether fiscal rules imposing limits on government borrowing will remain suspended in 2023 as well.
The rules, called the Stability and Growth Pact, were created to protect the value of the euro, but have been suspended since the start of the pandemic in 2020 to give governments space to fight the economic fallout from Covid-19.
The Pact was supposed to be re-established in 2023, but the new risk to growth posed by the war in Ukraine, sanctions on Russia and counter-sanctions will make the Commission reassess that objective.
“Given the current uncertainty, we will need to re-evaluate the expected deactivation of the general suspension clause in 2023 based on our (economic) forecast that I will present in mid-May,” said European Economic Commissioner Paolo Gentiloni.
Source: CNN Brasil
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