An agreement was reached among 27 European economy ministers on the reform of the stability pact to define the parameters regarding deficit and debt. In other words, the agreement serves to define public money that member states can use for fiscal maneuvers or to initiate other spending measures.
According to Spanish Finance Minister Nadia Calvino, the reform of the stability pact on which member states have reached political agreement is “balanced” because it “provides four guarantees: debt-related, budget deficit-related and counter-cyclical” and “investments that respond to European priorities”.
The text in the table provides, among other things, an average annual reduction in the debt ratio of 1 percentage point for countries with debt above 90% (such as Italy) and 0.5% for those between 60% and 90%. The 3% cap between the budget deficit and GDP remains in place; but with a range of corrective measures, including an obligation to target 1.5% to provide a safety “buffer” for the countries most at risk.
What did Minister Giorgetti say?
According to Italian Economy Minister Giorgetti, “Italy has achieved a lot”, although there are “positive things” and “others less”. “What we have signed is a sustainable agreement for our country, which, on the one hand, aims at a realistic and gradual reduction of the debt, and on the other hand, looks at Pnrr’s investments in a constructive spirit, in particular,” Giorgetti said. The Minister of Treasury considers it positive that “the automatic extension of the plan for Pnrr’s investments, the consideration of defense as an important factor and the transfer of our initial demands for reducing interest expenses from the structural deficit until 2027”.
Source: Today IT
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
