BRUSSELS (Reuters). – The European Commission on Wednesday stated that governments in the Euro zone should continue to spend next year on post-pandemic recovery. But, to different extents depending on how high their debt levels, they could also borrow money from the EU’s recovery account to support investment.

Paolo Gentiloni (European Economic Commissioner) stated, “For the Euro area, we call to support a moderately supportive fiscal position for 2022 with a focus investment, equipping workers and safeguarding solvency of viable companies.”

According to the Commission, 2022 will be the year that European countries move from responding in crisis to supporting recovery. This includes money from the EU Recovery Fund, which will fund 24% of all support actions.

According to the Commission, 40% of the grant component of the recovery fund, which totals 338 billion euro, will be spent by governments next year.

“The Recovery and Resilience Facility” is currently being implemented in 22 EU-member countries. They aim to use around 40% of the total grant money they receive in 2022. Making a success of this will perhaps be the greatest challenge – and opportunity – for the coming year,” Gentiloni told a news conference.

The Commission said that any fiscal support should consider the country’s public debt and limit spending by some countries like Italy (160% of its GDP).

Twelve euro-zone countries were found to have macroeconomic imbalances, according to the Commission. The most severe of these was in Cyprus (Greece), Italy (Italy).

Other than high levels of debt, Italy experienced low productivity growth. Greece was plagued by high unemployment. There were also a lot a bad loans, high potential growth, and high interest rates in Greece. Cyprus suffered from bad loans as well as a high current account deficit.