No agreement on the reform of European fiscal rules was expected at the end of the Ecofin Council on Thursday 9 November. However, the Spanish Presidency was of the opinion that the progress made since the October meeting of the EU Finance Ministers is real and gives reason to hope for a political agreement in principle (‘general approach’) at the December Ecofin Council (see EUROPE 13273/13).
To achieve this, the Spanish Minister of Finance, Nadia Calviño, has suggested convening an extraordinary ministerial meeting “at the end of November”. According to our information, the date in circulation is Thursday 23 November. At this additional meeting, the ministers could be presented with a compromise legislative proposal in due form.
In the public session, Ms Calviño said that the document setting out the main parameters of a possible agreement or ‘landing zone’, distributed the same day to the national delegations, had been “favourably received” by the Member States. She spoke of a “more reasonable and transparent” regulatory framework, which will encourage a “gradual and sustained” reduction in public debt while generating a budgetary margin to finance the climate and digital transitions.
In October, in Luxembourg, only Italy had expressed its views during the public debate. On Thursday, no Member State took the floor publicly at the meeting. At these two meetings of the Ecofin Council, discussions took place behind closed doors.
On his arrival in Brussels, the German Minister, Christian Lindner, welcomed the fact that the Spanish document incorporated the agreement reached this week in Paris with his French counterpart, Bruno Le Maire, on the development of uniform quantitative criteria that will enable: - to check that a State is reducing its public debt after a period of stabilisation by controlling its net expenditure; - to keep a country’s public deficit below the maximum threshold of 3% of national GDP.
“I am more optimistic” about a possible agreement before the end of 2023, said Mr Lindner, while pointing out that there needs to be an agreement on the “ambition” of the reform through the calibration of the agreed principles. “Now it’s all a question of numbers”, he observed.
Declining to comment publicly on the content of the reform, Mr Le Maire described the Spanish proposals as “constructive”, stressing the importance of striking a balance between the stability of public finances and the budgetary margin for the colossal investments needed for the economic transition. He will travel to Berlin to continue bilateral negotiations with his German counterpart, probably before the extraordinary meeting of the Ecofin Council.
“The cathedral is in sight”, said Ms Calviño, using the metaphor of the pilgrimage to Santiago de Compostela, the route taken to reach agreement on the reform at the informal meeting of European finance ministers held in Galicia in mid-September (see EUROPE 13252/18). And the candidate for the presidency of the EIB, who may be staking her nomination on the outcome of the reform, confirmed that the ministers need to work out the details of a future agreement, such as the “calibration” of the parameters.
According to one diplomat, three figures need to be agreed: the scale of the average debt reduction, the threshold for the control accounts and the level below 3% of GDP that a public deficit cannot exceed. (Original version in French by Mathieu Bion)