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Commission presents updated approach to fiscal policy response to coronavirus pandemic

The European Commission adopted a Communication on 3 March that provides Member States with broad guidance on the conduct of fiscal policy in the period ahead.

date:  11/03/2021

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It provides guiding principles for the proper design and quality of fiscal measures and sets out the Commission's considerations regarding the deactivation or continued activation of the general escape clause. The Communication also provides information on the overall direction of fiscal policy during the period ahead, including the implications of the Recovery and Resilience Facility (RRF) for fiscal policy. The Commission is committed to ensuring a coordinated and consistent policy response to the current crisis. This requires credible fiscal policies that address the short-term consequences of the coronavirus pandemic and support the recovery, while not endangering fiscal sustainability in the medium-term. The Communication thus warns against a premature withdrawal of fiscal support, which should be maintained this year and next until health risks diminish. Longer-term, however, fiscal policies should take into account the strength of the recovery and fiscal sustainability considerations in each Member State. This guidance will facilitate Member States in the preparation of their stability and convergence programmes, which should be presented to the Commission in April 2021. It will be further detailed in the Commission's European Semester spring package.