EU budget rules need adjustment but no debt cancellation, says Gentiloni
Reuters
Published Nov 29, 2020 14:42
Updated Nov 29, 2020 16:00
MILAN (Reuters) - European Union budget rules need to be more consistent with expected higher levels of sovereign debt, the bloc's economics commissioner said, but dismissed calls to cancel debt amassed during the coronavirus crisis.
The idea of debt cancellation has been raised by Italy's co-ruling 5-Star Movement, backing a proposal by EU Parliament President David Sassoli.
"In Europe debts cannot be cancelled", Paolo Gentiloni said.
The European Commission, which is in charge of enforcing EU fiscal rules, this year suspended requirements to keep government deficits below 3% of GDP and to cut public debt below 60% of GDP as the economy entered a record recession.
Gentiloni said on Sunday that eurozone average debt to GDP ratio would be 103%-104% at the end of the pandemic next year.
"We need to take in account this new scenario," the EU commissioner told Italian state broadcaster RAI, adding that discussions on how to adjust the budget would occur next year.
"The answer is not debt cancellation but creating conditions to gradually change and make our rules more consistent with the new reality," Gentiloni said.
Get The App
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.