Communication on the activation of the general escape clause of the Stability and Growth Pact

Summary:

Communication published by the European Commission on 20 March 2020, seeking to activate the general escape clause of the Stability and Growth Pact (SGP). It was released in the context of the COVID-19 outbreak.

Further information:

This initiative - which requires the support of the Council of the European Union - is part of the Commission's strategy for a quick response to the socio-economic effects of the sanitary crisis. Once endorsed, it allows Member States to undertake measures to deal adequately with the situation, while departing from the budgetary requirements that would normally apply under the European fiscal framework.

The coronavirus pandemic was designated an 'unusual even outside the control of government'. The Commission believed that more far-reaching flexibility under the SGP is required to protect European citizens and businesses from the consequences of this crisis and to support the economic following the pandemic.

Ministers of Finance of the EU Member States expressed their agreement on 23 March with the assessment of the Commission as set out in this Communication.

• Primary Source

• Alternative Source

News

EurActiv, 20/03/2020: Commission proposes unprecedented suspension of EU’s fiscal rules https://www.euractiv.com/section/economy-jobs/news/commission-proposes-unprecedented-suspension-of-eus-fiscal-rules/

Forbes, 20/03/2020: As The Euro Zone Economy Creaks A Financial Heave Ho From Von Der Leyen https://www.forbes.com/sites/stephenpope/2020/03/20/as-the-euro-zone-economy-creaks-a-financial-heave-ho-from-von-der-leyen/

RTÉ News, 20/03/2020: EU to suspend budget rules as ECB relaxes regulations https://www.rte.ie/news/business/2020/0320/1124319-ursula-von-der-leyen-on-coronabonds/

Reuters, 21/03/2020: EU executive moves to formalise suspension of EU budget rules https://uk.reuters.com/article/idUKKBN2180DV

Politico, 20/03/2020: EU triggers deficit rules ‘escape clause’ to boost public spending https://www.politico.eu/article/eu-triggers-deficit-rules-escape-clause-to-boost-public-spending/

Politico, 23/03/2020: EU ministers suspend deficit limits to fight coronavirus slump https://www.politico.eu/article/eu-ministers-suspend-deficit-limits-to-fight-coronavirus-slump/

The Independent, 23/03/2020: Coronavirus: EU agrees to lift spending limits on national budgets to fight Covid-19 https://www.independent.co.uk/news/world/europe/coronavirus-news-eu-spending-limits-national-budgets-outbreak-a9419281.html

The Irish Times, 23/03/2020: Coronavirus: Austerity era ends as EU suspends budget rules https://www.irishtimes.com/business/economy/coronavirus-austerity-era-ends-as-eu-suspends-budget-rules-1.4210158

EurActiv, 24/03/2020: EU countries warn of ‘severe economic downturn’, suspend Stability Pact https://www.euractiv.com/section/economy-jobs/news/eu-countries-warn-of-severe-economic-downturn-suspend-stability-pact/

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Official

European Commission: Press Release, 20/03/2020: Coronavirus: Commission proposes to activate fiscal framework's general escape clause to respond to pandemic https://ec.europa.eu/commission/presscorner/detail/en/ip_20_499

European Commission: Questions and answers: Commission proposes activating fiscal framework's general escape clause to respond to coronavirus pandemic (20 March 2020) https://ec.europa.eu/commission/presscorner/detail/en/qanda_20_500

Council of the European Union: Press Release, 23/03/2020: Statement of EU ministers of finance on the Stability and Growth Pact in light of the COVID-19 crisis https://www.consilium.europa.eu/en/press/press-releases/2020/03/23/statement-of-eu-ministers-of-finance-on-the-stability-and-growth-pact-in-light-of-the-covid-19-crisis/

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