Alignment of monetary and fiscal policies has proven to be decisive for the euro area's ability to withstand successive crises over the years. Today, the European Central Bank (ECB) continues its fight against inflation by implementing a monetary policy tightening unprecedented in pace and scale. At the same time, after allowing for some deviations from regular budgetary rules with the activation of the general escape clause in 2020, the EU is set to reapply its fiscal rules fully from 2024. In addition, co-legislators are currently discussing the proposed legislation by the European Commission for the reform of the economic governance framework. Five papers were prepared by the ECON Committee’s Monetary Expert Panel, discussing the interaction between monetary and fiscal policies in the euro area.
This document was provided by the Economic Governance and EMU Scrutiny Unit at the request of the Committee on Economic and Monetary Affairs (ECON) ahead of the Monetary Dialogue with the ECB President on 25 September 2023.Source : © European Union, 2023 - EP