The 27 Finance Ministers had the opportunity twice, on Monday 8 November, during an enlarged Eurogroup, and on Tuesday 9 November, during the Ecofin Council, to express themselves on the revision of the European economic governance framework (see EUROPE 12815/5).
These debates mark “the start of many discussions” that will follow so that we can provide political “guidance” on the evolution of fiscal rules in the light of the “changed circumstances” we face due to the Covid-19 pandemic, said Slovenian Finance Minister Andrej Šircelj after the Ecofin Council.
Among the factors to be taken into account is the need to finance ecological transitions, which the European Commissioner for the Economy, Paolo Gentiloni, had quantified on Monday at “€520 billion each year over the next 10 years”.
Another unavoidable element to be taken into account is the public debt that has increased to combat the health emergency since the spring of 2020, and above all the widening gap between the levels of public debt of the Member States, which would have risen from 30 to 100 points, according to the French Finance Minister
On Monday, Mr Gentiloni stressed the importance of providing a “credible” path for reducing public debt that does not jeopardise economic recovery, while noting the current low cost of debt servicing.
Another question raised concerns the timing of the proposals that the Commission is expected to present in the spring or summer of 2022. In the event of legislative proposals to be adopted in co-decision by the EU Council and the European Parliament, completing a reform of the Stability Pact in time for the beginning of 2023, when the opt-out from the fiscal rules will be deactivated, will be a challenge.
Countries that are frugal with their budgets ask that discussions not be rushed, as the quality of the work should take precedence over speed.
‘European Semester’. On Tuesday, the Ecofin Council adopted conclusions on the link between the NextGenerationEU Recovery Plan and the budgetary process of the European Semester.
These conclusions call on the Commission to present country-specific, socio-economic policy recommendations again in 2022. They also call for streamlining reporting requirements to avoid administrative overload and duplication.
See the EU Council conclusions: https://bit.ly/3bTxAmz (Original version in French by Mathieu Bion)