“Maintaining ample liquidity support for too long would carry
budgetary risks, but on the other hand we should also avoid a sudden
premature or uncoordinated removal of temporary support measures,”
Dombrovskis said on Friday (21 May), citing the crisis caused by the
Speaking to journalists at the Belem Cultural Centre in Lisbon after
an informal meeting of EU finance ministers (Ecofin) hosted by Portugal
as part of its presidency of the Council of the EU, he noted that
“fiscal policy should continue to support, both this year and next” the
economic recovery in the EU, adding “we can confirm our approach that we
will keep the general escape clause activated in 2022, but no longer
In March this year, the commission approved a communication on the
fiscal policy response to the COVID-19 crisis, opening the door to
maintaining the so-called ‘escape clause’ of the Stability and Growth
Pact into next year, reserving a definitive decision for May.
In an interview with Lusa earlier this month, Dombrovskis announced
that “unsurprisingly” the EU’s rules on budgetary discipline for
countries on issues such as their public sector deficit or debt should
continue to be suspended in 2022, given the effects of the pandemic.
The official decision is to be made known in early June. Earlier this
month, the commission’s spring macroeconomic forecasts brought an
upgrade to forecasts for economic recovery, with projected growth of
4.3% this year in the euro zone and 4.2% in the EU as a whole, and 4.4%
growth for both by 2022.
The EU executive has argued that the level of economic activity in
the EU and euro zone, as against before the economic crisis, that is in
late 2019, should be the key quantitative criterion for the overall
assessment of whether to deactivate or continue to apply the derogation
clause. The possible extension of the measure has been under discussion
between EU member states, not least because the economic recovery is not
expected to be complete before 2022.
Last year, and in view of the unprecedented impact of the pandemic,
the EU activated the clause that temporarily suspends rules on budgetary
discipline to enable member states to cope with the situation.
At Saturday’s news conference, Dombrovskis also said that at the
day’s Ecofin meeting, ministers had discussed “the risks and challenges
ahead in the context of economic recovery” following the pandemic.
“As with other previous crises, this one has left undesirable
legacies, such as high public and private debt and a negative impact on
social and labour markets,” he noted, adding that “European banks … will
play an important role in ensuring a successful and uniform economic