The ‘European Committee of the Regions’ (CoR) believes that the general escape clause in the Stability and Growth Pact, activated in spring 2020 to counter the economic impact of the Covid-19 pandemic, should remain in place until a new European economic governance framework is in place, according to a report drawn up by the President of the Walloon Region, Elio Di Rupo, and adopted on Tuesday 10 October.
The CoR supports the approach of the draft reform of the Stability Pact, which aims to gradually reduce public debt levels while creating the budgetary margin to allow public investment in the climate and digital transitions (see EUROPE 13252/18).
It nevertheless calls for the creation of a structured mechanism to involve local and regional authorities in drawing up the multi-annual plans that will detail the budgetary trajectories of the Member States and the reforms and investments to be put in place, “in order to avoid the harmful consequences in terms of legitimacy and effectiveness of excessive centralisation and verticality in the preparation of these plans”, as was the case, in its view, with the post-Covid-19 national recovery plans.
In addition, the Committee asks that national and regional co-financing of projects supported financially by the European Union be given specific accounting treatment with regard to the public deficit. Budgetary surveillance should no longer cover cyclical spending on unemployment.
A code of conduct should be proposed for the involvement of local and regional authorities in the budgetary process of the ‘European Semester’.
See the CoR opinion: https://aeur.eu/f/91l (Original version in French by Mathieu Bion)