Record debt and deficits during the pandemic prompted many nations to suspend their fiscal rules. Since 1990, a growing number of countries have adopted fiscal rules to strengthen budgetary discipline and enhance the credibility of public finances. These numerical limits on spending, deficits, or debt signal a government’s commitment to prudence. At the same time, fiscal councils are becoming more common to provide independent oversight and monitor the compliance of rules. What happens when a country must respond to a large...

Read more

A large and sudden jump in real interest rates could lead to a further selloff in stocks. Supply disruptions coupled with strong demand for goods, rising wages and higher commodities prices continue to challenge economies worldwide, pushing inflation above central bank targets. To contain price pressures, many economies have started tightening monetary policy, leading to a sharp increase in nominal interest rates, with long-term bond yields, often an indicator of investor sentiment, recovering to pre-pandemic levels in some regions such as...

Read more

Today, the Commission is proposing to the European Parliament and Council to sign up to a declaration of rights and principles that will guide the digital transformation in the EU. The draft declaration on digital rights and principles aims to give everyone a clear reference point about the kind of digital transformation Europe promotes and defends. It will also provide a guide for policy makers and companies when dealing with new technologies. The rights and freedoms enshrined in the EU's...

Read more

The Federal Reserve Board on Thursday released a discussion paper that examines the pros and cons of a potential U.S. central bank digital currency, or CBDC. It invites comment from the public and is the first step in a discussion of whether and how a CBDC could improve the safe and effective domestic payments system. The paper does not favor any policy outcome. "We look forward to engaging with the public, elected representatives, and a broad range of stakeholders as...

Read more

Inflation will remain high at the start of 2022 but will fall later on, especially towards the end of the year, Chief Economist Philip R. Lane tells Verslo žinios. Our current projections foresee inflation below the 2% target in 2023 and 2024. I just read the news this morning that the latest Purchasing Managers’ Index published this Monday shows that the eurozone economic recovery weakened further in January. This is due to the new restrictions imposed to contain the Omicron...

Read more

Growth slows as economies grapple with supply disruptions, higher inflation, record debt and persistent uncertainty. The continuing global recovery faces multiple challenges as the pandemic enters its third year. The rapid spread of the Omicron variant has led to renewed mobility restrictions in many countries and increased labor shortages. Supply disruptions still weigh on activity and are contributing to higher inflation, adding to pressures from strong demand and elevated food and energy prices. Moreover, record debt and rising inflation...

Read more

The Council approved conclusions today endorsing the new priorities for the 2022-2024 period under the UN-EU strategic partnership on peace operations and crisis management. The Council reiterates the firm commitment made by the EU and its member states to uphold the multilateral rules-based global order with the United Nations at its core, and it commends the achievements and recognises the mutually beneficial nature of the longstanding UN-EU cooperation on peacekeeping and civilian, police and military crisis management. The Council welcomes...

Read more

The European Commission has today disbursed €271 million to Finland in pre-financing, equivalent to 13% of the country's financial allocation under the Recovery and Resilience Facility (RRF). The pre-financing payment will help kick-start the implementation of the crucial investment and reform measures outlined in Finland's recovery and resilience plan. The Commission will authorise further disbursements based on the implementation of the investments and reforms outlined in Finland's recovery and resilience plan. The country is set to receive €2.1 billion in...

Read more