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EU sets more realistic fiscal rules.

 


Under the blueprint set out today, member states could agree on more realistic debt-reduction paths with the commission while creating extra space for public investment. It comes as member states face mounting budgetary pressure and the risk of a recession triggered by the energy crisis. The draft communication, seen by the Financial Times, urges member states to reach a «swift agreement» on revising the EU’s budget rules, which are seen as complex and poorly enforced. The critical thrust of the regulations would be to give member states greater ownership of their debt reduction plans, which would be agreed upon with the commission and signed off by the council of ministers.

Once agreed, member states would be under increased pressure to deliver on their commitments and would face a more realistic threat of sanctions if they failed to do so. The new rules would scrap a requirement that heavily indebted member states reduce their debt-to-gross domestic product ratio each year by at least one-twentieth of the difference between the current level and the EU’s 60 per cent target. Instead, the commission would set out a four-year plan for an EU member state to put its public debt burden on a credible, downward trajectory. Any deadline extensions would need to be justified by commitments to public investment and reform, with the plans agreed between the commission and member state and signed off by the council.

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  1. Alexia9 November 2022 at 19:24

    This is a good thing. The EU has finally realized that they need to act now and make things easier for countries, not harder. We are currently in a recession or at least some states are so any good measure helps.

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