Monday, December 11, 2023

An end to anti-inflation aid is urgently needed

Since spring, Brussels has demanded that countries reduce aid to reduce the impact of inflation and target the most vulnerable households and companies to reduce its costs. A message reinforced by the Executive of the community.

In fact, at the Ecofin held this month in Santiago, the EU launched a call for tougher taxes due to the return of sustainability rules in 2024. But regardless of Brussels’ insistence, the reality is that the Member States remain in these measures. Not only in Spain, where the PSOE and PP still agree on the need to continue the social shield worth 47,000 million. Even Germany, a historical defender of fiscal orthodoxy, has not set when it will eliminate the anti-price aid package worth 300 billion. As for the other two major euro economies, Italy is not even considering eliminating aid and in France most subsidies are maintained and only energy subsidies will be removed. It is obvious that the European governments do not want to suffer the electoral wear and tear of the elimination of a social shield in response to the Covid crisis and which was created by the increase in double-digit inflation. But this unique situation has ended, so it makes no sense to continue general assistance, which has high costs and from which many people benefit who do not even need it. In a context of economic slowdown and return to fiscal discipline, where a path will be drawn to limit the deficit of countries to 3% of GDP, it is important to focus aid on vulnerable groups. Only in this way can a greater amount be dedicated to the reduction of public imbalances and investments that improve activity.

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Nation World News Desk
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