Translated with AI
The European Commission has warned EU governments of the threat of a budget crisis amid massive spending to support the economy amid high energy prices, the Financial Times reports.
EU countries are already considering or implementing measures to curb rising fuel prices. These include electricity subsidies, tax and excise duty reductions, and the introduction of price caps.
The European Commission noted that such measures should be temporary and limited in scope. Brussels believes that overly generous support could lead to higher inflation and a larger budget deficit.
European Commissioner for Energy Dan Jorgensen stated that developments in one economic sector can impact society as a whole. He explained that the European Commission provides member states with technical advice and assistance in developing policy instruments, while remaining within fiscal boundaries.
The Financial Times notes that if the crisis develops, it could be the third major economic shock to the EU in the last six years. In 2020, the union faced the consequences of the coronavirus pandemic, and in 2022, economic difficulties related to the Ukrainian crisis.
During this period, the overall level of public debt in EU countries increased from 77.8% of GDP in 2019 to 82.1% by the end of last year.
