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Is the European Union moving towards a debt trap?

Brussels: Is the European Union moving towards a debt trap? Countries such as Germany have issued a warning about the progress of the Union’s debt. This sparked a heated debate at the Union Finance Ministers’ meeting in Brussels.

Disagreements about how to repay post-Covid debts also arose during the meeting. The majority of finance ministers agreed that a cautious approach to debt repayment was necessary. However, Germany’s Finance Minister has taken a tough stance on this issue. Finance Minister Christian Lindner demanded that the debt be paid off immediately.

In light of the COVID crisis, the EU has temporarily suspended its budget rules. As part of this, the deficit was restricted to 3% of GDP. It was also decided that the additional debt would be repaid at a rate of 5% per year.

This law is currently under review. Next month, the Commission is expected to release economic guidelines for 2023, followed by a proposal to change financial rules in June.

European Union economic chief Paolo Gentiloni said the ministers had a positive discussion.

France’s Finance Minister, Bruno Le Maire, stated that the European Union must improve its growth. The rate of growth is 1.2 percent to 1.3 percent. He claims that the rate in the United States is 2.5%. He said that the EU needs to achieve growth beyond this.

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