On Wednesday 17 January, the European Parliament voted by a comfortable majority (431 in favour, 172 against, 4 abstentions) in favour of the position of its Committee on Economic Affairs on the reform of the ‘preventive’ part of the Stability and Growth Pact (see EUROPE 13312/29, 13311/22). Inter-institutional negotiations began immediately afterwards in Strasbourg, with the Belgian Presidency of the Council setting itself the target of completing the dossier by early February.
As announced last week (see EUROPE 13327/14), the Greens/EFA Group voted against. Accepting these rules means “choosing impotence” at a time when the need for investment in defence and in the climate and digital transitions is immense, said its co-Chair, Belgium’s Philippe Lamberts, criticising the “obsessive delusion” of reducing public debt.
The Greens’ position was supported by the French Socialists, which parted ways from the S&D group as a whole, and by the entire radical left. French Socialist Aurore Lalucq compared the legislative reform to a “Heath Robinson contraption” that will not guarantee the necessary investment in strategic sectors.
The French delegation from the Identity and Democracy Group also opposed Parliament’s negotiating mandate, unlike the Italian delegation from the far-right group, which is in power in Italy, which approved it.
During the plenary debate, several groups criticised the position of the European Greens. Co-rapporteur Esther De Lange (EPP, Dutch) described as “regrettable” the position of the Greens/EFA group, which she said was very much in favour of the single currency, but against rules favouring budgetary stability. Parliament’s mandate introduces additional flexibility precisely to encourage investment in the EU’s political priorities, she believes.
Parliament’s other co-rapporteur, Margarida Marques (S&D, Portuguese), took issue with accusations of a return to economic austerity. On the contrary, the parliamentary mandate contains “a strong social dimension” and allows “more time for debt reduction. [...] We are not of those parties that reject austerity, but de facto defend a return to the old rules that maintain austerity”, she said.
On behalf of the ECR group, Belgium’s Johan Van Overtveldt advocated budgetary discipline, describing the accumulation of public debt as a “time bomb” for the states concerned. Gunnar Beck (ID, German), who voted against the mandate, criticised the planned weakening of debt reduction rules, comparing the euro to the old Italian lira.
In contrast, José Gusmão (The Left, Portuguese) predicted the return of “budget cuts” and opposed granting “unprecedented discretionary powers” to the European Commission, in particular to determine whether a country is in a crisis situation that would allow it to temporarily derogate from the rules of the Stability and Growth Pact.
The first Parliament/Council trilogue was held on Wednesday afternoon. Speaking on behalf of the Belgian Presidency of the Council, Hadja Lahbib, Minister of Foreign Affairs, said that the position of the Member States represented “a delicate balance” and that there were only “a few weeks left to complete the dossier”. This is a warning that the Belgian Presidency has little room for manoeuvre in reaching an agreement with MEPs.
Parliament and the Council of the EU have the same numerical criteria (‘benchmarks’) to ensure a reduction in the excessive public debt (above 60% of GDP) of the Member States. However, unlike the Council, Parliament does not include an obligation to reduce the public deficit to a level sufficiently below 3% of GDP.
To see the European Parliament’s mandate, go to https://aeur.eu/f/af6 (Original version in French by Mathieu Bion)