EU lawmakers greenlight new rules in national spending
Published: 04:04 PM,Apr 23,2024 | EDITED : 08:04 PM,Apr 23,2024
European countries' flags appear in front of the European Parliament, in Strasbourg eastern France. — AFP
STRASBOURG: European Union lawmakers on Tuesday backed new budgetary rules aimed at boosting investment while keeping spending under control.
Brussels spent two years negotiating an overhaul of its budget rules that pitted fiscally hawkish states against the bloc's most indebted nations.
A majority of lawmakers backed the new rules during a session of the European Parliament in Strasbourg, France. It will become official once the EU's 27 member states endorse the text.
The new rules are 'more flexible, more growth oriented, more credible in their implementation', the EU's economy commissioner, Paolo Gentiloni, said during a parliamentary debate. He said that, while 'not perfect', the reform was 'a good compromise'.
Climate activists argue the rules will limit states' ability to pour money into important green projects.
'It will force many EU governments to take austerity measures and limit their ability to borrow to finance essential climate, environmental and social policies,' Greenpeace EU said in a statement.
Margarida Marques, a socialist lawmaker who spearheaded the reform through the parliament, defended the text, insisting 'significant improvements' had been made.
'There is no doubt that this deal is much better than no deal and going back to the old rules or having no rules at all,' she said.
The old rules had been suspended between 2020 and 2023 to help the European economy weather the Covid pandemic and then Russia's assault on Ukraine, which sent energy prices soaring.
There was widespread agreement that there could be no return to the old rules without changes to make them practicable, despite public debt ballooning across the bloc.
Known as the Stability and Growth Pact, the rules stipulate a country's debt must not go higher than 60 percent of gross domestic product, with a public deficit of no more than three percent.
These goals remain in place, though there was fierce debate over how much the limits should be relaxed to give more room for investment.
The new text provides looser fiscal rules adapted to each state, allowing big spenders a slower route back to frugality.
The tailormade approach means each country presents its own adjustment trajectory to ensure debt sustainability. The new rules will apply to member states' 2025 budgets. — AFP
Brussels spent two years negotiating an overhaul of its budget rules that pitted fiscally hawkish states against the bloc's most indebted nations.
A majority of lawmakers backed the new rules during a session of the European Parliament in Strasbourg, France. It will become official once the EU's 27 member states endorse the text.
The new rules are 'more flexible, more growth oriented, more credible in their implementation', the EU's economy commissioner, Paolo Gentiloni, said during a parliamentary debate. He said that, while 'not perfect', the reform was 'a good compromise'.
Climate activists argue the rules will limit states' ability to pour money into important green projects.
'It will force many EU governments to take austerity measures and limit their ability to borrow to finance essential climate, environmental and social policies,' Greenpeace EU said in a statement.
Margarida Marques, a socialist lawmaker who spearheaded the reform through the parliament, defended the text, insisting 'significant improvements' had been made.
'There is no doubt that this deal is much better than no deal and going back to the old rules or having no rules at all,' she said.
The old rules had been suspended between 2020 and 2023 to help the European economy weather the Covid pandemic and then Russia's assault on Ukraine, which sent energy prices soaring.
There was widespread agreement that there could be no return to the old rules without changes to make them practicable, despite public debt ballooning across the bloc.
Known as the Stability and Growth Pact, the rules stipulate a country's debt must not go higher than 60 percent of gross domestic product, with a public deficit of no more than three percent.
These goals remain in place, though there was fierce debate over how much the limits should be relaxed to give more room for investment.
The new text provides looser fiscal rules adapted to each state, allowing big spenders a slower route back to frugality.
The tailormade approach means each country presents its own adjustment trajectory to ensure debt sustainability. The new rules will apply to member states' 2025 budgets. — AFP