Friday, December 1, 2023
HomeEconomyEurozone struggles to coordinate energy support plans as recession looms

Eurozone struggles to coordinate energy support plans as recession looms

by Jan Strupczewski

BRUSSELS (Reuters) – Measures to support euro zone economies as they deal with soaring energy prices could undercut 2023 budget plans if needed Complicating matters, the region’s finance ministers said on Monday that the extension would be extended until spring, noting the potential impact on already high inflation.

Sharing the euro between ministers representing 19 countries, who will return in early December when they discuss 2023 the budget in more detail this topic, but they reiterated that such support should be temporary and targeted rather than stimulating demand.

While a number of support programmes totalling around 200 billion euros or 1.% of Eurozone GDP will be The second quarter is due 2023 and some may have to be extended if prices continue to stay high, complicating budget planning.

“We are mindful of what happens to next year’s budget outlook if the measures are extended into the spring and beyond,” Minister Chair Pashar Donoghue told a news conference.

“So this will be a very important juncture for budget policy in the next period,” he said.

Fair competition in the EU is another key goal after Germany in September, by providing households and businesses with up to 200 billion euros worth of Helped, angered EU counterparts – something few countries can match.

Critics say this massive support threatens fair competition within the EU single market. Other EU countries have also announced plans of support, but on a much smaller scale.

This fiscal stimulus-like program not only adds to the already huge public debt of the 19 countries Eurozone, but also makes the European Central Bank counter currency Inflated, reaching an annual 10.7% in October.

“Ministers take note of… trade-offs” Donoghue said:

With this in mind, euro zone ministers agreed in October with the government’s Help should be targeted and temporary – although most such programmes are not yet.

“Most of these measures, so far, have been adopted by member states about

% are untargeted – meaning they benefit all or a large part of the population,” said the European Commissioner for the Economy, Paolo Gentiloni.

“We certainly know that goals are not always easy, politically and technically, especially if you have to react very quickly to v,” he said.

To address this, one of the options being discussed is for the government to provide consumers with a fixed amount of energy at subsidized prices, with consumption above that limit settled at a higher market price, officials said.



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