Eurozone finance ministers agree deal for more spending

Eurozone finance ministers are set to agree this month a more growth-friendly fiscal policy, a change from current targets that would pave the way for more spending in Germany amid fears of a downturn.

Repeated attempts to boost investment and growth have failed in past years as Germany, the eurozone’s largest economy, kept posting large budget surpluses despite calls to spend more.

But now, amid fresh recession fears in Germany and concerns about the impact on the global economy of the coronavirus outbreak, eurozone countries have reached a preliminary agreement to raise spending in the event of a downturn.

“If downside risks were to materialise, fiscal responses should be differentiated,” a draft text agreed by eurozone envoys said.

The agreement needs to be formalised by eurozone finance ministers in Brussels on February 17.

The change would allow governments with more solid finances to focus more on growth rather than stability.

Reuters