The Spanish presidency of the Council of the EU maintains the ambition of completing the great reform of European tax rules before the end of the year. "There has been a unanimous agreement on the focus" of the negotiation "to reach an agreement in autumn", concluded yesterday the First Vice President of the Government and Minister of Economic Affairs, Nadia Calviño, after presenting her work plan to her European colleagues for move forward with the dossier.
Calviño wanted to present the document at the first Ecofin to be held under the Spanish presidency, which is also the last before the summer break in community institutions and national governments, among which there are deep divergences on how to resolve the debate. While France and Italy support the approach proposed by the European Commission, based on the bilateral negotiation of adjustment plans; Germany and the Netherlands, among others, continue to insist on setting “indicators” to ensure a minimum fiscal adjustment effort in all countries.
According to diplomatic sources, the tone of the debate during the working breakfast of the European Finance Ministers was "very positive and constructive". Now, the Spanish presidency of the Council is going to intensify the technical work to prepare a compromise proposal as soon as possible, although it is unlikely that there will be progress in this regard before the informal council of European Economy Ministers that will take place on September 14 and 15 in Santiago de Compostela. Calviño, however, is determined to "start the political debate after the summer" and "have the fiscal rules approved by the end of the year."
The document presented yesterday organizes the debate around four interconnected pillars: the role of each institution in the application of the rules, the mechanisms to ensure compliance with the new framework, the definition of "parameters" that guarantee "credible paths of reduction of debt” and the need for these to be “compatible with growth and job creation”.
It is in these last two points that the Spanish presidency will have to do something similar to square the circle, find a formulation that guarantees that there will be fiscal discipline but, at the same time, leaving space to make the massive public investments that the European Union has proposed to carry out to complete the energy and digital transition.
