MEPs Esther de Lange (EPP, Dutch) and Margarida Marques (S&D, Portuguese), co-reporters for the European Parliament, are in favour of including a quantified target for reducing the public debt of EU countries as part of the reform of the Stability and Growth Pact.
Dated Thursday 12 October, their draft report stresses the importance of Member States whose debt exceeds 60% of GDP or whose deficit exceeds 3% of GDP developing a reference trajectory that will lead to a sustainable reduction in debt.
More specifically, the two rapporteurs consider that the average reduction in relation to national GDP of the public debt of the countries concerned should reach a fixed percentage (to be determined) over a period comprising the duration of the macro-budgetary plans for consolidating public finances (between four and seven years) plus ten years, i.e. the period covering the analysis of national debt sustainability. At the same time, they remove the condition, included in the Commission’s initial proposal, that the increase in net public spending should remain below output growth in the medium term throughout the duration of the macro-budget plan.
The provision on debt reduction appears to be close to an option tested in early October by the Spanish Presidency of the EU Council after the informal meeting of European finance ministers (see EUROPE 13262/13).
By means of delegated acts, the Commission will present its methodology for analysing the sustainability of a Member State’s debt. In particular, it will have to take into account the factors relevant to assessing the sustainability of this debt, taking into consideration the future evolution of sustainable growth, interest rates, the level of inflation, liquidity risks, the structure of the debt, contingent liabilities, the potential growth impact of the reforms and investments underpinning the implemented national medium-term fiscal-structural plans, as well as climate risks.
The two MEPs have also strengthened the provisions aimed at keeping the European Parliament informed and those requiring Member States to consult their national parliaments and civil society when drawing up their macro-budget plans.
On Tuesday 17 October in Luxembourg, the Ecofin Council will debate the reform of the European economic governance framework. The Spanish Presidency hopes to be able to submit a compromise legislative text with a view to reaching a political agreement by the Member States in November.
To see the draft ‘Lange/Marques’ report: https://aeur.eu/f/92j (Original version in French by Mathieu Bion)