Euro zone puts pressure on Dutch, Germans to spend more Euro zone puts pressure on Dutch, Germans to spend more

By Jan Strupczewski and Francesco Guarascio

LUXEMBOURG (Reuters) - Germany and the Netherlands, which run budget surpluses, should invest more to help boost economic growth at home and throughout the euro zone, top euro zone officials said on Wednesday, echoing a call from the European Central Bank last month.

Euro zone economic growth is slowing as its biggest economy, Germany, teeters on the brink of a recession, keeping inflation subdued. But despite an ECB call for a fiscal stimulus, the euro zone is not planning any concerted action.

Instead, top euro zone officials put pressure on Germany and the Netherlands to use their "fiscal space" - EU jargon for sound public finances - to invest more and boost growth in their own economies and in the whole euro zone.

"There are two kinds of countries - those who need to go further with their fiscal efforts and those who need to invest in growth. Namely Germany and the Netherlands have to understand that, because it is in their own interest and in the collective interest of the euro zone," European Commissioner for Economic and Financial Affairs Pierre Moscovici said.

In a discussion paper, the European Union's executive arm said the slowing euro zone economy needs pre-emptive fiscal stimulus or it will face a long period of low growth and that economic activity will not rebound this year.

The chairman of the 19 ministers representing euro zone countries, Mario Centeno, said fiscal policy in the euro zone should respond to the economic situation.

"The fiscal stance must play together with the economic conditions of the euro zone," Centeno told reporters. "We need to look carefully ...who has fiscal space to act and ... who does not, (so that they) continue to reduce their debt."

French and Italian finance ministers also urged Germany and the Netherlands to act.

"... Member states with more fiscal space should make use of this fiscal space to have overall an aggregate fiscal stance of the euro area that is appropriate, taking into account the macroeconomic situation," Italy's Roberto Gualtieri said.

The Commission paper underlined that governments had to move quickly because it took time for fiscal policy changes to affect the economy.

However, German Chancellor Angela Merkel has resisted calls to draft a fiscal stimulus package for her country, and some officials said that even two quarters of contracting gross domestic product -- a recession -- might not be enough to make Berlin loosen its purse strings.

The Commission document said that to spur growth, further ECB monetary policy easing would be less effective and have larger unwanted side effects than fiscal stimulus by governments, which now would be more effective than in normal economic times.

Other relevant articles 
[2019-10-09 09:40:09] European shares weighed down by trade, Brexit worries
[2019-10-09 05:50:09] Euro-Area Finance Chiefs Brace for Fresh Fight Over Budget
[2019-10-08 22:50:05] Trade Rules Emerge as Weapon to Fight Climate Change in Europe
[2019-10-08 20:15:04] Europe says assessing 737 MAX software, downplays talk of split
[2019-10-08 13:40:04] European stocks tumble further as Brexit, trade worries deepen
[2019-10-08 11:15:04] StockBeat: Europe Stocks Hit as China Blocks NBA in Blacklist Spat
[2019-10-08 11:10:03] Italy court orders antitrust to recalculate Enel 93 million euro fine
[2019-10-08 10:00:10] Positive German data, Airbus shares drive tentative gains in European stocks
[2019-10-08 00:15:27] Billions of euros of EU funds misspent last year: auditors
[2019-10-07 23:20:25] U.S. puts Hikvision, Chinese security bureaus on economic...
[2019-10-07 17:00:35] Euro zone needs pre-emptive fiscal stimulus or may face protracted low growth: document
[2019-10-07 14:35:26] JPMorgan Says Euro Area to Be Key Equities Winner in Brexit Deal
[2019-10-07 14:10:23] German Factory Slump Deepens as Investors See Eurozone Recession
[2019-10-07 14:00:31] Euro-Area Investor Sentiment Drop Highlights ECB Stimulus Limits
[2019-10-07 11:35:23] Euro zone banks face growing risk from maturing business cycle:...
[2019-10-07 10:45:23] Euro zone investor morale hits lowest level in 6.5 years: Sentix
[2019-10-07 09:45:25] European shares extend losses on weak German data, trade anxiety
[2019-10-06 15:15:19] Philippine President Duterte says he has chronic neuromuscular disorder
[2019-10-04 16:00:16] More pain for Europe Inc as earnings drought seen spilling over into 2020
[2019-10-04 14:50:11] Exclusive: European Commission set to approve UK billion-pound power backup plan
[2019-10-04 13:20:20] U.K. Car Sales Lag Major European Markets Ahead of Brexit
[2019-10-04 09:50:14] European shares higher on hopes of Fed action, chip stocks gain...
[2019-10-04 08:55:10] French budget deficit stood at 123.1 billion euros at end-August
[2019-10-03 21:10:08] Fighting GM puts a financial squeeze on striking union workers
[2019-10-03 19:40:08] Vivendi sues Mediaset in Italy over pan-European plan
[2019-10-03 18:30:09] EU ministers to clash over future euro zone budget financing
[2019-10-03 15:10:08] Opening Bell: U.S. Futures Rein In Deep Selloff; Europe Hit By U.S. Tariffs
[2019-10-03 15:00:58] Spanish government says will spend 300 million euros to combat...
[2019-10-03 11:10:07] StockBeat: H&M Shines as Europe Tries to Shake off Tariff, PMI...
[2019-10-03 11:10:07] Euro zone producer prices fall more than expected in August
[2019-10-03 10:50:07] EU courts can order Facebook to remove illegal comments...
[2019-10-03 10:25:07] Euro zone business growth stalled in September: PMI
[2019-10-03 09:40:08] Europe dips as global trade worries persist; Airbus, luxury stocks provide...
[2019-10-03 03:00:15] Asian stocks tumble after U.S. announces tariffs on Europe
[2019-10-02 14:35:07] Exclusive: Tunisia plans to issue up to 800 million euros of...
[2019-10-02 11:10:07] French Suez targets 1 billion euros in cost cuts by 2023 to lift...
[2019-10-02 09:35:07] European shares drop on growth fears, London slides on fresh...
[2019-10-02 09:15:15] NewsBreak: Europe Stocks Open Sharply Lower After Bleak U.S. PMI
[2019-10-02 07:35:06] Europe third-quarter earnings outlook deteriorates as trade war,...
[2019-10-02 07:10:07] EU insurance investments dip to 10.3 trillion euros in 2018
[2019-10-01 20:25:04] Brexit means Europe not blameless in global trade gloom: Merkel
[2019-10-01 18:25:04] King dollar reigns supreme as U.S. outshines the euro area
[2019-10-01 18:15:04] EIB kicks off first major bond sale linked to new euro zone rate
[2019-10-01 18:10:26] UniCredit to sell 5 billion euros of soured home mortgages next...
[2019-10-01 12:10:03] Explainer: Meet ESTR, the biggest change in euro zone markets...
[2019-10-01 11:10:03] Euro zone inflation slows year on year in September on cheaper energy
[2019-10-01 10:25:09] Factbox: European airline collapses since 2017
[2019-10-01 10:15:09] Euro zone factory activity shrank for eighth month in September -...
[2019-10-01 09:40:03] Chip stocks propel gains in Europe, airlines soar
[2019-10-01 02:50:26] Dollar gains before manufacturing data, euro crumbles on German...
[2019-10-01 00:15:27] Trade conflicts cost German exporters 30 billion euros in lost...
[2019-09-30 14:35:28] NewsBreak: Euro Hits New 2019 Low After German CPI Falls Below 1%
[2019-09-30 14:30:23] Euro Hits New 2019 Low After German CPI Falls Below 1%
[2019-09-30 14:00:28] Erdogan Puts Stamp on Economic Vision That Rests on Flimsy Base
[2019-09-30 13:55:22] European Jobs Offer Some Joy Amid Manufacturing, Inflation Gloom
[2019-09-30 12:50:23] JPMorgan Says It’s Time to Switch From U.S. to Euro-Area Stocks
[2019-09-30 11:15:22] Euro zone unemployment in surprise fall to lowest rate in more...
[2019-09-30 09:40:23] European shares lower as BP weighs, trade tensions intensify...
[2019-09-30 00:00:29] McIlroy criticizes European Tour for easy course set-ups
[2019-09-29 08:20:18] Analysis: Polish banks haunted by Swiss franc mortgages in European court
[2019-09-29 01:00:24] Euro Hits 2-Year Lows, Is 1.08 Next?
[2019-09-27 16:50:14] IMF Says Greece Needs More Fiscal Space From European Partners
[2019-09-27 11:35:11] European Economy Stumbles as Confidence Drops to Four-Year Low
[2019-09-27 11:20:15] StockBeat: Cheap Currencies (and Little Else) Support Europe...
[2019-09-27 09:55:11] Forex - Euro Hovers Above 2019 Lows; Pound Falls as BoE Hawk Softens
[2019-09-27 09:35:26] European shares rise on trade-fueled optimism, London shines
[2019-09-27 03:30:13] Dollar supported by safety flows; euro at new 2-year low
[2019-09-26 12:55:07] NewsBreak: Euro Hits New 2019 Low vs Dollar
[2019-09-26 09:55:07] European shares edge higher on trade hopes, Imperial Brands...
[2019-09-25 12:20:08] European stocks sink as Trump fuels grim mood
[2019-09-25 11:35:07] Renault ready to be part of a European batteries project:...
[2019-09-25 09:35:08] European shares stumble as techs drop; political uncertainty in...
[2019-09-24 22:55:05] Santander books impairment of around 1.5 billion euros on UK unit
[2019-09-24 14:40:14] Daimler to pay 870 million euros fine in relation to diesel...
[2019-09-24 14:00:12] European Steel Industry Sounds Alarm Over Economic Outlook
[2019-09-24 09:35:05] European shares rebound as banks rise, trade hopes ease growth...
[2019-09-24 06:30:04] Europe Seeks to Bring Its Laggards on Climate Policy Into Line
[2019-09-24 04:25:08] European business group warns of China economic stagnation if...
[2019-09-24 03:20:26] U.S. stock futures gain on trade hopes, euro dogged by dismal...
[2019-09-24 03:05:25] Dollar finds support as trade talks stay on track, euro nurses...
[2019-09-23 21:10:23] Honda to cease diesel vehicle sales in Europe by 2021
[2019-09-23 17:10:30] Forex - Euro Falls on Weak PMI Data; U.S. Dollar Steady
[2019-09-23 17:05:23] Strains that sank Thomas Cook weigh on European airlines
[2019-09-23 14:05:22] Opening Bell: Confused Trade Signals Pressure Futures, Euro Stoxx;...
[2019-09-23 13:55:22] Euro zone money markets accelerate rate cut bets on poor PMI
[2019-09-23 13:45:23] Thomas Cook owes Tunisian hotels 60 million euros: minister
[2019-09-23 11:55:22] Factbox: European reaction to Thomas Cook bankruptcy
[2019-09-23 11:15:23] StockBeat: PMIs, Thomas Cook, Oil Cast a Pall Over European...
[2019-09-23 09:35:22] European shares edge lower after dismal France data
[2019-09-23 09:20:47] NewsBreak: Europe Airlines Surge at Open on Thomas Cook Collapse
[2019-09-22 02:40:19] ATP roundup: Federer, Team Europe grab Laver Cup lead
[2019-09-21 18:15:16] Federer keeps Team Europe ahead in Laver Cup with win over Kyrgios
[2019-09-20 20:45:18] EU court ruling on Starbucks, Fiat million euro tax orders on...
[2019-09-20 20:35:11] A big fiscal splash still a step too far for Europe
[2019-09-20 18:00:31] Retailers, defensives lead European shares higher
[2019-09-20 14:50:12] Pound Rally Fizzles as Ireland Puts Dampener on Brexit Hopes
[2019-09-20 14:10:15] Europe Renews Pledge to Retaliate Against Any Trump Car Tariffs
[2019-09-20 12:30:18] U.S. Futures, Europe Stocks Edge Up; Dollar Slips: Markets Wrap
[2019-09-20 09:50:10] Google to invest 3 billion euros in European data centers
[2019-09-19 23:40:08] Germany eyes carbon price of 30 euros a tonne in transportation,...