German calls to introduce stricter requirements when revising fiscal rules, such as a debt reduction of at least 1.0 percent of annual gross domestic product (GDP), are bumping into Friday’s 27th.
This is the first debate on the European Commission’s (EC) proposal to reform a budgetary framework that would again require the public deficit to be cut below 3.0 percent of GDP and public debt to be reduced after four years of being frozen by the Covid-19 pandemic under 60
To this end, Brussels wants to give governments greater decision-making powers on how to achieve these goals. However, it requires an annual deficit adjustment of at least 0.5 percent of GDP by reaching three and proposes a gradual debt reduction over four years. expandable up to seven.
Most critical of the Berlin approach was French industry minister Bruno Le Maire, who expressed his disagreement with the automatic and uniform rules they defend and which he identified as the only point of disagreement in this first approach.
Ministers also recognized the urgency of finding common ground, as they aimed to reach an agreement before the end of 2023, with the intention of completing the legislative work in time to apply the new fiscal rules in 2025.
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