October 10, 2019 / 9:08 AM / a month ago

Euro zone ministers back more spending 'where possible' to boost growth

FILE PHOTO: Eurogroup President Mario Centeno arrives at the European Union leaders summit in Brussels, Belgium, June 21, 2019. REUTERS/Piroschka van de Wouw/File Photo

LUXEMBOURG (Reuters) - Euro zone finance ministers have agreed to spend more “where possible” to counter the single currency area’s economic slowdown and rising downside risks to the economic outlook, their chairman Mario Centeno said on Thursday.

The vague declaration follows calls from the European Central Bank last month for euro zone governments to use fiscal policy to boost growth since monetary policy alone will not suffice.

Centeno said the ministers agreed to closely co-ordinate policies in case downside risks to growth materialized. Such risks include a no-deal Brexit, heightened trade tensions between the United States and China, potential tariffs on European cars exported to the U.S. as well as geopolitical tensions.

“We agreed that if there is a more marked downturn, we should not tighten our policies and make it worse. Where possible, our fiscal stance should be more accommodative,” he said.

The pressure to spend more is mainly on Germany and the Netherlands, because both have been running budget surpluses for years. Germany is in need of large investments but is also keen to reduce its debt that this year is to fall below 60% of GDP.

German and Dutch finance ministers said on Wednesday their countries were already spending more.

Reporting By Jan Strupczewski

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below