An Assessment of the Euro Area Fiscal Stance in 2026 and 2027 amid an Energy Supply Shock

This Economic Brief analyses the impulse that national budgets and the EU budget are expected to provide to the euro area economy in 2026-2027, a period characterised by a new energy supply shock.

Highlights

• This Economic Brief analyses the impulse that national and EU budgets provide to the euro area economy.
• A mildly expansionary fiscal stance is projected in 2026
• In 2027, the fiscal stance is forecast to return to neutrality based on the no-policy-change forecast. 
• An appropriate fiscal stance amid an energy supply shock should avoid fuelling inflationary pressures in the short term and enhances the resilience of the economy in the medium term.

Information and identifiers

Economic Brief 91. July 2026. Brussels. PDF. 18pp. Tab. Graph. Bibliogr. Free.

KC-01-26-024-EN-N (online)
ISBN 978-92-68-36424-6 (online)  
ISSN 2443-8030  (online)
doi:10.2765/5356385 (online) 

JEL classification: E61, E62, H50.

Disclaimer

European Economy Economic Briefs are written by the staff of the European Commission’s Directorate-General for Economic and Financial Affairs to inform discussion on economic policy and to stimulate debate. The views expressed in this document are solely those of the author(s) and do not necessarily represent the official views of the European Commission.