BRUSSELS – European Union finance experts have reached a preliminary agreement on changing the way the bloc determines some deficit figures, which will lessen the pressure for austerity measures in some crisis-hit economies, an EU official said Thursday.
The change to the calculation of the bloc’s structural deficit would have “very significant” positive consequences for Spain because of its labor market structure, and somewhat less so for Ireland, Greece and Portugal, the official said.
The nature of the change is highly technical, changing the methodology of measuring the output gap between potential and structural growth. The result is used to calculate the structural deficit figure — the deficit adjusted for the cyclical strength or weakness of the economy — upon which the European Commission bases its policy recommendations.