Filenews 27 November 2024
The budgets of Cyprus and seven other states are fully aligned with the recommendations of the new fiscal rules, the European Commission announced yesterday when presenting the European Semester package.
The European Commission has examined draft budgets for 2025 submitted by 17 euro-area members in light of new fiscal rules, which set as a key condition the annual growth of each country's primary expenditure below a certain threshold.
Eight euro area Member States are considered to be in line with the fiscal recommendations, while seven are not fully aligned, one is not aligned and one may not be aligned: Greece, Cyprus, Latvia, Slovenia, Slovakia, Italy, Croatia and France are estimated to be in line with the recommendations, as their net expenditure is projected within the ceilings.
Estonia, Germany, Finland and Ireland are estimated not to be fully in line with the recommendations, as their annual net expenditure (Finland, Ireland) and/or cumulative net expenditure (Estonia, Germany, Ireland) are projected to exceed the respective ceilings.
Luxembourg, Malta and Portugal are estimated not to be fully aligned with the recommendation: although their net expenditure is projected within the ceilings, they will not have phased out their emergency energy support measures by winter 2024-2025, as recommended by the Council. Lithuania is estimated not to be in line with the recommendation, as net expenditure is projected to exceed the percentages considered by the Commission as an appropriate first step in implementing the new economic governance framework.
The new framework supports Member States in achieving macroeconomic stability, growth and fiscal sustainability, which are crucial elements for the EU's economic strength in today's challenging global environment. It also encourages reforms and investments that will lay the foundations for long-term economic stability and sustainable growth.
Finally, it contributes to creating a more resilient, fair, competitive and secure EU economy for the benefit of citizens. The post-programme surveillance reports assess the economic, budgetary and financial situation of the Member States that have benefited from financial assistance programmes (Greece, Ireland, Spain, Cyprus and Portugal), focusing on their repayment capacity. The reports conclude that all five Member States retain their debt repayment capacity.
