European Commission Vice President Valdis Dombrovskis | John Thys/AFP via Getty Images
Spend now to rescue economic growth, Dombrovskis says
Commissioner calls on Germany and other countries to counter a slowdown.
Updated 11/7/19, 12:01 PM CET
European Commission Vice President Valdis Dombrovskis Thursday urged governments to spend now to boost eurozone growth after monetary policy has struggled to stimulate business.
The Latvian issued the call as part of the Commission’s latest economic forecast, which downgraded projections made in July for both 2019 and 2020.
Eurozone gross domestic product is now set to come in at 1.1 percent this year, then 1.2 percent in 2020 and 2021. In July, Brussels said GDP would increase by 1.2 percent this year and 1.4 percent in 2020.
Uncertainty from Brexit and global trade tensions between the U.S. and China are chiefly to blame for the downturn.
Dombrovskis especially called on countries with extra cash, such as Germany and the Netherlands, to start spending to counter the slowdown.
“Those Member States that have fiscal space should use it now,” Dombrovskis said in a statement. “I urge all EU countries with high levels of public debt to pursue prudent fiscal policies and put their debt levels on a downward path.”
Eurozone gross domestic product is now set to come in at 1.1 percent this year. In July, Brussels said GDP would increase by 1.2 percent this year.
The calls come almost two months after the European Central Bank cut its target interest rates deeper into negative territory and restarted its multi-trillion-euro bond-buying program to boost prices and stave off an economic downturn.