The European Commission presented its recommendations to member states on Wednesday 2 June. She proposes that the Stability and Growth Pact, which was suspended in order to allow the Twenty-Seven to spend lavishly to deal with the Covid-19 crisis, not be reinstated before 2023. In an interview with World, Paolo Gentiloni, the Commissioner for the Economy, explains why the European budgetary rules must, at all costs, be revised. The former Italian prime minister also returns to the recovery plan of 750 billion euros, financed by a debt common to the Twenty-Seven, and on the need to do more if the Old Continent wants to emerge from the pandemic stronger than it was before.
The Commission presented its recommendations to the Member States. What is the main message?
We must continue to support the European economy, to put it on the path to sustainable growth. The time has not come to restore our public finances, uncertainties persist, and that would be a gigantic mistake, which would jeopardize the recovery. For the first time in our history, European budgetary and monetary policies are coordinated. We must continue at all costs. The achievement of this pandemic is not only solidarity between Europeans, implemented through the recovery plan of 750 billion euros. It is also the fact that growth is at the heart of our economic policy. The level of debt is not the key word.
Our ambition is not only to have a rebound – we are there, with growth above 4% this year, like next year, in Europe; in France, in 2021, it will even exceed 5% – but to ensure that after 2022 growth is stronger than what it was before the crisis linked to Covid-19. Over the past ten years, the European economy had become Japanese. Everything was low – interest rates, growth and inflation – and we thought it was going to last a long time. Our challenge is to break with this state and create an environment more favorable to growth. I think we’ll get there.
Some countries, like Germany or the Netherlands, are planning to start reducing their debt relatively quickly. Are they making a mistake?
“Over the past ten years, the European economy had become Japanese. Everything was low – interest rates, growth and inflation. Our challenge is to break with this state ”
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