Budgets for 2022: is Europe up to the challenges?

Europe's parliaments are currently discussing the budgets for 2022, with the main focus on stabilising the economy after the Covid crisis. Inflation and energy prices are rising, but at the same time Europe wants to invest in the environment, and the member states' access to the billions from the EU recovery programme is therefore contingent on compliance with pro-climate measures. Europe's press reveals the multifaceted nature of the challenges.

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Avvenire (IT) /

The EU needs a new stability pact

Italy's budget plan for the next three years is based on the assumption of a more flexible monetary policy in Europe. It's time to negotiate a new European stability pact, says Avvenire:

“We are starting out on a long and bumpy road on which the 'hawks' who fear the risk of excessive solidarity and the 'doves' who get upset over too many constraints will reappear on the scene. The demands of the countries that call themselves 'frugal' will collide with those of countries that demand more deficits - a dialectic that is inevitable and even necessary, as long as it does not degenerate into a crippling conflict. In any case, there remains a window of opportunity that must not be missed to offer Europe at least extended and flexible fiscal solidarity.”

Eco - Economia Online (PT) /

Not a homemade budget

Next year's budget is only possible thanks to Brussels, Eco observes:

“It is the implementation of the European budget in Portugal. In other words, it's not really a Portuguese budget, but the budget that the European Union is making possible for the Portuguese state in 2022. It is the EU funds that allow it to tackle the strategic priorities: social and economic recovery, increasing family incomes and supporting the companies in their investments, innovation, liquidity and streamlining.”

Times of Malta (MT) /

Finally bold moves on climate protection

The Times of Malta heartily approves of the Maltese government's plans to promote climate-friendly mobility in 2022:

“If the budget had to be defined by a colour, this year it would be green. In a welcome and needed approach, the government is steering the economy and society towards a greener tomorrow. ... Electrification of cars is also a high priority and, apart from the significant incentives aimed at supporting the purchase of such cars, the investment in charging infrastructure is also critical to support the transition. The bold move to provide free public transport is also welcome even though its sustainability and total cost has to be analysed further.”

Der Standard (AT) /

Vienna skimping in the wrong places

Austria is setting the wrong priorities, says Der Standard :

“A lot more for the climate, a little more for education, research, agriculture and culture. ... The increased budget for education just about covers the expected salary increases for teachers. Civil servant pensions cost more than the total education budget provides, and both are dwarfed by the annual subsidy for general pensions. No provision is being made for the huge problem of nursing care, and kindergartens remain underfunded. Austria is spending heavily on the past and skimping on the future. There is little evidence of a desire to carve out the future or to reform.”

To Vima (GR) /

Explosive conditions

To Vima finds the plans in Greece's new budget to cut Covid aid for workers and businesses worrying:

“According to the draft for the 2022 budget these expenditures will be reduced from 16.7 billion euros this year to 2.6 billion euros. So we're talking about a sudden reduction that, combined with the energy crisis and the approaching wave of price hikes, could create explosive conditions for small businesses and their employees. The government's financial experts are aware of this, and they should look for a solution to allow a smoother landing in the new reality.”

Népszava (HU) /

Orbán making promises he can't keep

The Hungarian prime minister is campaigning on a non-existent budget, Népszava notes:

“Already in the summer there were numerous examples of Viktor Orbán bombarding the population with a series of promises that weren't even foreseen in the 2022 budget law [approved in the spring]. Last week's announcements of wage and pension increases, tax cuts and bonuses already surpass almost all similar 'welfare' measures of the past 20 years, and serve as a prime example of what could be called 'budgetary alcoholism'.”

El País (ES) /

We need a new tax system

Spain will have to completely reform its public finances at the latest by 2023 when the EU's Covid recovery programme expires, writes El País:

“The structural deficit in our public accounts is not the result of current spending or extravagant investments, but of our low tax-to-GDP ratio. It corresponds to 34.8 percent in Spain, 5.7 percentage points lower than the average 40.5 percent in the Eurozone. ... There is therefore a way to consolidate public finances without sacrificing investments or social spending. That way is a tax reform. In an increasingly globalised economy this is not an exclusively local issue. ... The OECD's recent agreement on a minimum corporate tax rate of 15 percent should be just a first step.”