BRUSSELS, March 22 Reuters European Union leaders will back on Friday a slightly tighter fiscal policy for the euro zone next year, to help bring down inflation and make public finance more stable after the excess spending of the COVID pandemic and the energy price crisis.

The endorsement comes after finance ministers of the 20 countries using the euro agreed on March 11 on fiscal policy guidelines for 2025 to take into account new fiscal rules that give more time to cut debt while maintaining investment.

The European Council endorses … the …recommendation on the economic policy of the euro area, draft conclusions of the EU leaders say.

The endorsed recommendation says that the new fiscal rules would require an overall slightly contractionary fiscal stance in the euro zone in 2025.

This would be appropriate in light of the current macroeconomic outlook, of the need to continue to enhance fiscal sustainability, and to support the ongoing disinflationary process, while policies should remain agile in view of the prevailing uncertainty, the endorsed recommendation says.

The European Commission forecasts that the aggregate euro zone budget deficit in 2024 will shrink to 2.8 of GDP from 3.2 in 2023, and then ease only marginally to 2.7 in 2025.

This should help in bringing down consumer inflation from 5.4 in 2023 to 2.3 in 2024 and then to 2.0 in 2025, reaching 1.9 in 2026, according to European Central Bank forecasts.

The leaders will also endorse a plan agreed…