There is nothing to be done for the most indebted countries. The European Union is on its way back to the Stability Pact and its rules. The General escape clause, the Pact clause, which came into play during the pandemic and allowed EU governments to exceed the 3% deficit ceiling, except for unexpected deviations, will be withdrawn at the end of this year. Time is running out and governments are urged to agree on new stabilization rules to prevent the return of the old ones, which have been tacitly defended by various governments, even if they are no longer seen as suitable by all.
But the first meeting among economy ministers on fiscal rules reform ended in black smoke. Positions among various governments, influenced by different national sensitivities, are still far away. “It is our responsibility to ensure stable public finances for future generations,” said German Finance Minister Christian Lindner for Berlin. But on the occasion of the meeting in Brussels, he added that the situation is “extremely complex” because “on the one hand we have to pay interest on the capital markets, on the other hand we are looking for more public investment”. “I prefer to pay lower interest rates and use that money for public investments,” the minister affirmed, confirming the German economic prescription based on the stability of public finances.
Valdis Dombrovskis, vice-president of the European Commission, is also considered among the so-called ‘hawks’ who at the end of the meeting acknowledge the differences between the various governments. “We need to strike the right balance between country ownership and specificity on the one hand, equal treatment of Member States on the other, predictability and transparency on the other,” he said to make it clear that there are governments on the one hand. Those who do not want to dictate economic policy from Brussels, do not accept derogations and exceptions to the stability rules.
“There are also many technical details that need to be agreed upon, but it can be said that we have laid a solid foundation so that the Council can present a clear vision in March.”
Source: Today IT
Karen Clayton is a seasoned journalist and author at The Nation Update, with a focus on world news and current events. She has a background in international relations, which gives her a deep understanding of the political, economic and social factors that shape the global landscape. She writes about a wide range of topics, including conflicts, political upheavals, and economic trends, as well as humanitarian crisis and human rights issues.
