On Tuesday 7 November, Esther de Lange (EPP, Dutch) and Margarida Marques (S&D, Portuguese) presented their draft report on reforming the ‘preventive’ part of the Stability and Growth Pact to the European Parliament’s Committee on Economic and Monetary Affairs (see EUROPE 13272/11).
“We support the logic” behind the legislative package on the table. “We want an economic governance that is more country-specific within an EU framework”, said Ms de Lange. In her view, to ensure adoption of the rules, Member States should be able to present their medium-term budget trajectory before discussing it with the European Commission, which should have the final say.
On the quantitative safeguard criteria, the Christian Democrat advocated stabilising the public debt/GDP ratio during the period of implementation of the multi-annual programmes (between 4 and 7 years) that the Member States will draw up to set out their budgetary, investment and reform policies. This would be followed by an obligation to reduce public debt by x% of GDP, on average over a ten-year period subsequent to that of the multiannual programme.
“We still need to agree on the number that will replace the ‘x’”, observed Ms de Lange.
The two co-rapporteurs also support the idea of simplifying European fiscal rules by focussing surveillance on a single criterion based on net expenditure in order to place a State’s public finances on a virtuous path of debt reduction.
According to the two MEPs, national co-financing for programmes supported by the EU budget and interest generated by loans taken out under the Next Generation EU recovery plan should not be taken into account when calculating the public deficit.
Ms Marques advocated rules that encourage the consolidation of public finances, but that are not pro-cyclical, and that are sufficiently flexible to deviate for a time from the path set in the event of a crisis.
In front of a sparse audience, Billy Kelleher (Renew Europe, Irish) stressed the importance of the ‘corrective’ aspect of the Pact, which must be sufficiently dissuasive to prevent a country from having to undergo a financial rescue in the future, as was the case in Ireland. He tabled amendments allowing flexibility to absorb shocks and revive the economy after a crisis.
The element of flexibility was taken up by Antonio Rinaldi (Identity and Democracy, Italian). He welcomed the provisions of the draft ‘de Lange/Marques’ report on the monitoring of net expenditure and Member States’ adherence to future rules.
Speaking on behalf of The Left, Portugal’s José Gusmão criticised a legislative package which, in his view, replicates the logic of the macroeconomic rescue plans to which several southern European countries were forced to submit during the sovereign debt crisis in the euro area. He called for uniform rules that respected national democracies, and deplored the lack of reference to social and environmental objectives.
In favour of numerical criteria to reduce public debt, Enikő Győri (NI, Hungarian) opposed granting new powers to the European Parliament so as not to encroach on the Commission’s competences.
According to Ms de Lange, compromise amendments to the text on the table will be put to the vote in the parliamentary committee at the beginning of December, in time for the European Parliament to adopt its negotiating position at the plenary session starting on Monday 11 December.
To see the draft ‘de Lange/Marques’ report: https://aeur.eu/f/92j (Original version in French by Mathieu Bion)