The French elected representatives of the Renew Europe group in the European Parliament, Pascal Canfin and Stéphane Séjourné, were delighted, on Tuesday 2 March, that the political battle over the application of the Stability and Growth Pact was about to be won by the supporters, of which they are part, of an extension - until the end of 2022 - of the freeze on European fiscal rules.
“I think I can tell you that this is the dominant position and that we have won this battle”, Mr Canfin told some journalists, on the eve of the presentation of guidelines in this area by the European Commission.
Maintaining the “state of fiscal emergency” until the end of 2022 will allow time to return to a more normal macroeconomic situation and avoid repeating “the mistakes of 2009, when we tightened the bolts too quickly”, said the Chairman of the parliamentary Committee on Environment.
At the last meeting of the Eurogroup, the Commission had announced the presentation, at the beginning of March, of guidelines intended to guide reflection on the fiscal rules frozen since the outbreak of the Covid-19 pandemic in spring 2020 (see EUROPE 12658/2). However, a formal decision is not expected before the end of the first half of the year on the basis of updated economic data, Portuguese Prime Minister António Costa recently stressed.
Beyond the debate on the application of the Pact in 2022, a “second battle” on the reform of fiscal rules will begin after the German legislative elections in September 2021 and the French presidential elections in the spring of 2022, Mr Canfin said. According to him, a CDU/die Grünen political majority in Germany would be compatible with the French positions on the matter.
He spoke of the need to have “common rules”, “that are more intelligent, dynamic and take into account the necessary ecological transition”. “There are several options for ‘protecting’ investments that are part of major European priorities”, he noted, without making a treaty change “a justice of the peace” of a successful reform of the Pact.
“We’ve consistently done a lot of work”, considered Mr Séjourné.
The S&D group on an identical line. On Tuesday, the coordinator of the S&D group in the European Parliament’s Committee on Economic and Monetary Affairs, Spain’s Jonás Fernández, said that a tightening of fiscal and monetary policies was unthinkable until Europe has returned to its pre-crisis economic level.
“We must not risk this epochal effort by now falling into the trap of the budget hawks who are calling for a hasty and reckless application of the EU’s stringent fiscal rules”, he said in a statement. (Original version in French by Mathieu Bion)