Speaking ahead of the European Commission’s fiscal policy recommendations expected tomorrow, the Socialists and Democrats in the European Parliament warn against a hasty and reckless implementation of the EU’s budgetary rules and call for an extension of the general escape clause in the Stability and Growth Pact.

Jonás Fernández MEP, S&D spokesperson on economic and monetary affairs, said:

“With the economic fall-out of the Covid-19 pandemic hitting SMEs and workers hard, this is not the time for austerity policies. Since the beginning of the crisis, EU institutions, the ECB and governments have done everything in their power to prevent households, companies and the economy at large from collapsing.  We must not risk this epochal effort by now falling into the trap of the budget hawks who are calling for a hasty and reckless application of the EU’s stringent fiscal rules. Until Europe has returned to pre-crisis 2019 macroeconomic levels, we must not even consider tightening our monetary and fiscal policies. As Europe is still in the ‘whatever-it-takes’ phase of the recovery, we call on the Commission to extend the general escape clause.”

Biljana Borzan MEP, S&D vice-president for an economy that works for all, added:

“Luckily, EU institutions and governments have so far not repeated the mistakes of the last crisis, when they passed the buck to the ECB.  On the contrary, since the beginning of the pandemic, monetary and fiscal policies have worked hand in hand to keep the economy from collapsing. We must not fool ourselves: we are in for the long haul. The Recovery and Resilience Fund will only start creating jobs as of 2022. While the pandemic is still destroying lives and livelihoods all across Europe, this is not the time to count pennies. It is the time for radical action and big firepower.”