Austria sharply criticized the latest compromise proposal to reform EU debt rules. Finance Minister Magnus Brunner said it lacked ambition.
In early October, the Spanish President of the EU Council presented a compromise proposal to reform the EU’s public spending framework, the Stability and Growth Pact. The Spanish Presidency was confident that a common position could be reached on Tuesday.
However, while Austria, one of the harshest critics of the current proposal, continues to oppose the latest reform, Spain has stated that an agreement will not be reached before November.
“The proposal to reform the stability pact is not yet ambitious enough,” Brunner told Handelsblatt on Monday (16 October).
Although the proposed compromise is better than the original project, it still leaves a lot to be desired.
“Of course it should be possible to take on more debt in difficult times, but you also need to offset that,” continued Brunner.
The European Commission aims to reform EU debt rules by the end of the year to allow more flexibility in debt reduction. Instead of a uniform system like before, she wants country-specific approaches to help southern member states with relatively high debt ratios.
However, Brunner argues that the proposed pace is still “too slow”.
“The risk of backroom deals occurring is great,” he said. If there is to be an “individual agreement” for countries, there must be “very transparent, rules-based uniform guidelines for this”.
Debt reduction is particularly necessary because it creates “budget wiggle room for real times of need,” Brunner continued.
Austria and other fiscally conservative EU states have long been reluctant to reform strict budgetary rules.
In Germany, Federal Finance Minister Christian Linder (FDP) insists on strict debt rules and therefore also delays reforms at EU level.
[Bearbeitet von Kjeld Neubert]