US Treasury Secretary Janet Glenn has entered into an often heated debate in the European Union over how to adjust public finances after Covid-19, saying more flexible fiscal rules are needed, according to Bloomberg.
The EU has suspended debt and deficit restrictions linked to the Maastricht Treaty to allow states to meet the additional costs needed to combat the pandemic. The so-called Stability and Growth Pact is set to re-enter into force in January, although some countries are pushing for changes to the strict rules when they return.
“My personal view is that they need a lot more flexibility and that the features of the Maastricht Treaty have made it really almost impossible to pursue sensible fiscal policy in a place like Italy,” Yellen said in an interview with Alan Friedman about the forthcoming book. του “Il prezzo del futuro”.
Although the US official’s comment runs counter to the tougher line traditionally followed by northern European countries, including Germany, it echoes growing calls within the bloc for nations to have more discretion in how to support their economies. The European Commission has said it will reassess the reactivation of the pact as soon as it publishes new financial forecasts on 16 May.
Yellen also encouraged European partners to distinguish between deficit financing costs and investment and infrastructure spending.
“Since this is a good project that will have a return that exceeds the cost of capital, you say that makes a lot of sense,” Yellen said. “The same should be true for a country.”
Source: Capital
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
