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US Treasury chief warns EU against hobbling coronavirus recovery with tight spending rules
Source: Politico
U.S. Treasury Secretary Janet Yellen on Tuesday warned the EU against reimposing rigid spending rules before the economy has recovered from the pandemic.
Speaking to reporters, Yellen waded into a debate that is splitting the bloc by questioning whether there is enough flexibility in the eurozone’s spending and deficit rules — aligning more closely with the position of Southern capitals than with Northern countries such as Germany and the Netherlands.
The fiscal rules, which have been put on ice during the COVID-19 crisis, require governments to stay below a 60 percent debt-to-GDP ratio and cap budget deficits at 3 percent of economic output.
“It’s important to think about whether or not [the rules] create the flexibility that countries in the EU need in order to be able to address cyclical developments,” she told journalists at a briefing.
Speaking to reporters, Yellen waded into a debate that is splitting the bloc by questioning whether there is enough flexibility in the eurozone’s spending and deficit rules — aligning more closely with the position of Southern capitals than with Northern countries such as Germany and the Netherlands.
The fiscal rules, which have been put on ice during the COVID-19 crisis, require governments to stay below a 60 percent debt-to-GDP ratio and cap budget deficits at 3 percent of economic output.
“It’s important to think about whether or not [the rules] create the flexibility that countries in the EU need in order to be able to address cyclical developments,” she told journalists at a briefing.
Read more: https://www.politico.eu/article/janet-yellen-warns-eu-coronavirus-recovery-spending-rules/