Brussels, 18/06/2014 (Agence Europe) -German Chancellor Angela Merkel says that the current stability and growth pact leaves enough flexibility for investing in the future.
Merkel said at a press conference in Berlin on Wednesday 18 June that the German government agreed that there was no need to change the stability and growth pact because they all agreed that it provides sufficient flexibly. She said that she had spoken to Sigmar Gabriel about this on Wednesday morning.
Earlier statements by Gabriel suggested that Germany might change its views on the stability and growth pact (see EUROPE 11102). Social Democrat minister Sigmar Gabriel suggested that the cost of reform be ignored when calculating public expenditure under the SGP in order to give counties more time to correct their excess deficits.
Debate is ongoing at European level over the best way to stimulate growth as the member states consider the work programme for the new European Commission when it takes office in the autumn.
In Italy, Matteo Renzi's government is preparing to take over the head of the Council of the EU from the Greeks on 1 July. It takes the same line as German Social Democrats. It is suggested that Italy has said that it will back the EPP candidate, Jean-Claude Juncker, for president of the European Commission as long as it wins the day on the SGP. France is not saying anything publicly for fear of being accused of making a U-turn on its commitments but would no doubt approve of this type of easing of the SGP rules.
An easing of the SGP rules could be achieved by changing the way performance is calculated or by granting more time to countries to carry out reforms. A diplomat said that nobody is calling for any root-and-branch changes, but rather for a tinkering around the edges. (MB)