European Commission proposes to keep EU borrowing limits suspended in 2023
The European Commission proposed on Monday to keep EU curbs on government borrowing suspended in 2023 amid great economic uncertainty and a sharp slowdown in growth caused by Russia’s invasion of Ukraine. The European Union’s budget rules, the Stability and Growth Pact, were set up to protect the value of the euro. They were suspended at the start of the pandemic in 2020 to give governments room to fight the economic fallout of COVID-19. They were to be reinstated in 2023, but new risks to the economy from the war in Ukraine, a fresh spike in energy and food prices and the impact on consumer and business confidence made the Commission reassess that.
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