HomeAnalysisEU must focus on health, jobs now โ€“ Commission

EU must focus on health, jobs now โ€“ Commission

European Union{EU}countries must now focus on investment in public health and protecting jobs and companies, and worry about fiscal sustainability later, the European Commission said on Wednesday.

In its annual recommendations to the blocโ€™s 27 countries, the EU executive said that the EU should coordinate its approach to economic recovery once the coronavirus pandemic subsides.

Budget gaps in all EU countries except Bulgaria will widen well beyond the EUโ€™s usual ceiling of three per cent of gross domestic product this year.

It said that governments would use public money to prop up economies that were expected to plunge into their deepest recessions ever this year.

It added that public debt was also going to rocket, breaching the EUโ€™s normal requirement that it should be falling.

โ€œOur message is crystal clear. โ€œThe needs to be a supportive fiscal stance in all Member States.

โ€œWe recommend that all Member States take all necessary measures to effectively address the pandemic, sustain the economy and support the ensuing recovery,โ€ European Commissioner for Economic and Financial Affairs Paolo Gentiloni said.

He also cautioned that governments should not sacrifice investment as they seek to rebalance their books in the future.

โ€œIt will be vital to avoid making the mistakes of the past: In the fiscal consolidation of 10 years ago, investment was the first victim. To repeat this approach would be to sacrifice our long-term priorities,โ€ he said.

Gentiloni, however, urged governments to focus investment and reform during the recovery phase on the EU priority of a transition to a โ€œgreenโ€ and digital economy and ensuring social fairness.

Also the Commissionโ€™s Vice-President, Valdis Dombrovskis, encouraged EU governments to promote green and digital transformations.

โ€œThe EU executive will link the disbursement of more than 1 trillion Euros in recovery funds in loans and grants over the next few years to these objectives,โ€™โ€™ Dombrovskis said.

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