Ratas: European Union's fiscal policy must become conservative again
The expansionary fiscal policy of the European Union launched to alleviate the coronavirus crisis cannot last indefinitely and must soon return to a conservative and balanced fiscal policy, Prime Minister Jüri Ratas (Center) said on Tuesday.
"In any case, it has to move back to conservative fiscal policy. And I'm sure it will move, the only question is when," Ratas said on ERR's online broadcast "Otse uudistemajast".
Ratas says he does not think the economic policy launched during the coronavirus pandemic, which abandoned requirements for fiscal balance and hugely increased the supply of money, is sustainable.
The EU has acted differently from its economic stimulus measures than it did 12 years ago, during the previous crisis, acting counter-cyclically, Ratas said.
"It's unusual for the public sector to give money to the private sector to keep businesses afloat. But I think that's the only way right now. But it has to be fast, short-term and well-targeted," the prime minister emphasized.
He noted he had asked the European Commission when they would see a return to the usual rules. "Today, no one is able to say when the conservative policy will start again, but I am sure it will recover - it cannot last so long that there is no budget balance," Ratas said.
At the same time, the prime minister said the European Union had done well during the coronavirus pandemic by agreeing on a €750 billion economic relaunch package and a €1.1 trillion seven-year budget The EU has also launched a joint procurement of vaccines, he added.
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Editor: Helen Wright