Assessment of the fiscal stance appropriate for the euro area in 2021

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Publication Date 01/07/2020
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Assessment published by the European Fiscal Board (EFB) in July 2020 regarding the general orientation of fiscal policy in the Eurozone.

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All main forecasters anticipate a deep recession of around or more than 8% of GDP this year, followed by a partial recovery in 2021; downside risks are substantial. The fiscal measures adopted by individual Member States, flanked by the decisions of the European Central Bank and the proposals of the European Commission, in particular the Recovery Instrument are fully warranted.

In light of the partial and fragile recovery expected for 2021, the Board cautions against a premature withdrawal of fiscal support measures at the Member State level and looks forward to a swift and effective implementation of recent EU proposals. It advocates a strong focus on growth-enhancing government expenditure including investment, to provide stabilisation in the short-term while bolstering prospects of stronger future growth.

The European Fiscal Board (EFB) is an independent advisory body of the European Commission.

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