The European Commission will present “in March” its fiscal guidelines for economic and budgetary policies for 2023, for the period between when the Stability and Growth Pact will apply again and the entry into force of reformed European fiscal rules, its executive Vice-President Valdis Dombrovskis said on Monday 7 February in a debate with the European Parliament’s Committee on Economic and Monetary Affairs.
Presented in the form of an Interpretative Communication, these guidelines, which will therefore be presented after the informal meeting of euro area Finance Ministers scheduled for the end of February in Paris (see EUROPE 12871/3), will constitute “a bridging solution”, he said, following the example of the Communication that the Commission presented in January 2015 to stimulate structural reforms and facilitate public investment (see EUROPE 11229/13). They will take into account the international macroeconomic situation and national budgetary situations and will present the state of play of the reflection on the reform of the European economic governance framework.
To Rasmus Andresen (Greens/EFA, Denmark), who advocated extending the Stability Pact’s derogation clause, Mr Dombrovskis retorted that freezing fiscal rules and reflecting on the reform of the Pact are “two different issues”. In particular, he recalled that the Pact’s derogation clause is subject to the strict condition of a “severe economic downturn”, which no longer seems to be the case, since the European Union has recovered its pre-Covid-19 pandemic GDP.
Barring a major reversal, the Pact’s derogation clause will therefore be deactivated at the beginning of 2023.
In May, the Commission will present its socio-economic policy recommendations for each EU country. Between May and July, proposals will follow on the reform of the fiscal rules.
Next Generation EU. Several MEPs, such as Danuta Huebner (EPP, Poland) and Joachim Schuster (S&D, Germany), questioned the Commission on the experience gained in coordinating economic and budgetary policies through the implementation of the Next Generation EU Recovery Plan.
The European Commissioner for the Economy, Paolo Gentiloni, considered that “the method” used, which combines the granting of subsidies that can be accompanied by loans and the application of structural reforms, facilitates “ownership” of the common rules by the Member States. This is an interesting fact in the context of the current debate on the reform of fiscal rules, he said.
To Enikő Győri (NI, Hungary), who asked about the legal basis for the Commission to block the Hungarian recovery plan, Mr Dombrovskis recalled that the Regulation establishing the Recovery and Resilience Facility, the budgetary instrument at the heart of the European Recovery Plan, required all Member States to include in their plan “a substantial part” of the structural reforms included in the 2019 country-specific recommendations.
“If the Commission is confident that these recommendations will be addressed, we can move forward. Unfortunately, this is not the case at this stage”, he added.
The Commission will present its winter economic forecasts on Thursday 10 March. (Original version in French by Mathieu Bion)