The new version of the pre-pandemic fiscal rules, if imposed, would jeopardise the European economy. The new fiscal rules for the eurozone, set to replace the Stability and Growth Pact and the Fiscal Compact, will be revealed in the coming months. Da Social Europe
The new fiscal rules for the eurozone, set to replace the Stability and Growth Pact (SGP) and the Fiscal Compact, will be revealed in the coming months. Key decisions are going to be made, including the possibility of keeping the old rules, by the Council of EU finance ministers (Ecofin). The starting point has been a general acknowledgment of the ineffectiveness, lack of transparency and difficult enforceability of the current framework.
The European Commission’s initial proposal, unveiled in November 2022, would introduce a four-year adjustment plan for countries exceeding the deficit (3 per cent) or debt (60 per cent) ratios of the SGP, in relation to gross domestic product, stemming from a country-specific ‘debt sustainability analysis’ (and taking account of interest payments and ‘automatic stabilisers’). Member states would be monitored on their adherence to this agreed ‘technical trajectory’ but could ask for a three-year extension if evidencing stronger commitment to ‘structural reforms’ and growth-enhancing investments.
