Eurozone Ministers: To Tighten Fiscal Policy

Eurozone finance ministers supported a recommendation made by the European Commission on Monday to begin tightening fiscal policy, paving the way for a gradual phasing out of government support provided to companies and households in response to rising energy prices. Last week, the European Commission urged EU governments to start gradually tightening fiscal policy as a technical recession had not occurred as expected, the labor market remains significantly tight, and borrowing costs are rising rapidly while the European Central Bank works to reduce high inflation. The ministers reiterated their commitment to improve coordination of policies that support the economy in the face of rising energy prices to ensure that poorer countries, which cannot afford energy support like wealthier nations, do not find themselves at a competitive disadvantage. In their statement, the ministers said, "In the absence of new price shocks, we will continue to phase out energy support measures, which will also help reduce the government deficit."