Like the Member States in the Council of the European Union (see EUROPE 13172/6), MEPs see the recent proposal to reform the European economic governance framework as a good starting point for the upcoming negotiations.
While some political groups insist first on consolidating public finances while others want to prioritise investments in the climate and digital transitions, the principle of setting up multi-annual macro-budget plans based on a public expenditure indicator and allowing for a gradual reduction in public debt was not called into question while stimulating reforms and investments, on Tuesday 9 May, during a debate in the European Parliament plenary session (see EUROPE 13170/1).
On behalf of the EPP group, German MEP Markus Ferber said that the current rules of the Stability and Growth Pact have not worked well, as no Member State has ever been sanctioned, despite the infringement procedures launched. In his view, the proposal on the table will not really restore the “credibility” of the Pact, particularly because Member States will have excessive flexibility in applying the future rules.
Belgian Conservative Johan Van Overtveldt (ECR) agreed with the need to “ensure budgetary discipline to reduce debt”, noting that the average debt and deficit in the EU at the end of 2022 was 84 and 4.5% of GDP respectively (91.6 and 4.7% in the euro area). Increasing Member States’ ownership of their budgetary path and socio-economic policies will allow them to put more pressure on the European Commission, he added.
For Marco Zanni (ID, Italian), the opposite is true: too much discretionary power is left to the Commission, which could, according to him, “instrumentalise the reforms” that the Member States will implement.
On the left of the political spectrum, Pedro Marques (S&D, Portuguese) insisted on “the social dimension (which) only appears at the bottom of the page” of the legislative package on the table. He regretted the “lack of a permanent investment capacity” at the EU level and called for the Commission to be more accountable to the European Parliament, if it is empowered to sanction more easily Member States that do not respect their macro-budget plan.
Philippe Lamberts (Greens/EFA, Belgian) said that “the public deficit rule should be deactivated” in the Pact and that “debt should be assessed against the climate risk”. “More public debt today for less ecological, social and financial debt tomorrow”, he advocated.
José Gusmão (The Left, Portuguese) said that the Commission’s proposals are not flexible enough to protect investments. He bluntly denounced “colonial structures” at the European level imposing budgetary policies when it should be up to national parliaments to decide on trajectories.
On the centre-right, Stéphanie Yon-Courtin (Renew Europe, French) considered that “the rules (were) no longer adapted” to a world that had changed after the Covid-19 pandemic. Advocating both “fiscal responsibility and realism”, she warned against “the return of simple concepts of austerity as the only compass” leading to sound public finances. “One-size-fits-all debt and deficit reduction rules have proven ineffective”, she insisted (see EUROPE 13148/10).
On behalf of the Swedish Presidency of the Council of the EU, Jessika Roswall pledged that her country’s authorities would take the discussions as far as possible before handing over to Spain. The dossier should be on the agenda of the June Ecofin Council. Ms Roswall also hoped that an inter-institutional agreement on the reform of the Pact would be reached “before the end of 2023”. (Original version in French by Mathieu Bion)