Europe's economy expected to rebound in H2: EU official
The EU finance and economy ministers agreed that fiscal support should not be withdrawn too early, while member states will have to adapt their policies at an appropriate time to ensure fiscal sustainability over the medium term.
BRUSSELS -- The European economy is expected to rebound in the second half of this year despite the very uncertain economic outlook, European Commission Executive Vice-President Valdis Dombrovskis said on Tuesday.
"As regards fiscal policy, we will need to continue to support the economy this year and next. National policies need to remain agile," Dombrovskis said when addressing a press conference following an informal virtual meeting of European Union (EU) finance and economy ministers.
Dombrovskis stressed that the general escape clause, which allows for temporary deviation from fiscal policies without endangering fiscal sustainability, would remain active throughout 2022 before likely being deactivated in 2023. "We will take the final decision in spring," he added.
The EU finance and economy ministers agreed that fiscal support should not be withdrawn too early, while member states will have to adapt their policies at an appropriate time to ensure fiscal sustainability over the medium term, noted the executive vice-president.
In terms of digital taxation, Dombrovskis said the European Commission is continuing preparations for proposing an EU digital levy, to serve as an EU own resource by 2023.
"We still need a global agreement on reforming the institutional system at the level of the Organization for Economic Cooperation and Development (OECD) and Group of Twenty (G20)," he said, adding that the EU digital levy will complement the OECD process and be compatible with the World Trade Organization (WTO) rules.