The Portuguese Finance Minister, João Leão, said that his European counterparts “fully agree with the European Commission’s proposals” on the approach to deciding whether to maintain or lift the freeze on the Stability and Growth Pact, on Tuesday 16 March, at the end of the ‘Ecofin’ Council.
Mr Leão recalled that the ‘Ecofin’ Council will be called upon to make a decision in the spring on the basis of updated data to be provided by the Commission in May.
On Tuesday, the debate on the extension of the Pact’s general escape clause until the end of 2022, as proposed by the Commission (see EUROPE 12670/1), was short, as the issue had been discussed the day before, at the enlarged Eurogroup meeting. Denmark stressed the importance of the political decision ultimately resting with the ‘Ecofin’ Council, while Sweden emphasised the importance of a return to compliance with existing fiscal rules once the post-Covid-19 recovery is sufficiently entrenched.
For Commission Vice-President Valdis Dombrovskis, the Finance Ministers share the same view as the Commission on the key criterion to be used - namely the return to the pre-crisis level of GDP in 2019 - to take such a decision.
The day before, the Eurogroup had unanimously reiterated that the time had come to maintain unfailing fiscal support for the economy still affected by the pandemic. For the first time, the Eurogroup estimated that the fiscal stance in the euro area will have to be expansionary in 2021 and 2022 (see EUROPE 12678/5).
As for the separation of the discussions on the deactivation of the general escape clause of the Pact and on the revision of the European fiscal rules, Mr Dombrovskis recalled that there was “no formal link” between the two issues. On Monday, EU Economy Commissioner Paolo Gentiloni said that the debate on reforming EU fiscal rules would be relaunched in the second half of 2021.
In parallel, the European Parliament will try to establish its position by next summer. Discussions in Parliament’s Committee on Economic and Monetary Affairs will begin shortly on the basis of the draft report that Margarida Marques recently sent to her counterparts (see EUROPE 12677/11). (Original version in French by Mathieu Bion)