The Ministers of Economy and Finance of the European Union reached an agreement this Wednesday to reform the union's fiscal rules, which after four years frozen by the pandemic, once again limit the debt and deficit of the member states.
After almost two hours of meeting by videoconference, and once Italy has withdrawn its objections that requested more fiscal space to promote the ecological transition of the industry, European sources have confirmed. Ecofin has thus achieved the objective of closing the agreement before the end of the year in order to formally adopt the new fiscal rules before the end of the legislature.
The pact has been possible after Germany and France reached an agreement the day before on the main lines of the reform of the Stability and Growth Pact and allows Spain to fulfill one of the great objectives that it had set for its presidency of the Council of the European Union.
The details of the agreement are still unknown, after some figures still had to be finalized at that meeting. Before the meeting, there were basically two open questions, according to negotiation sources: one was related to the speed with which a country must continue reducing the deficit below 3%, something that would take them out of the corrective arm of the Stability and Growth Pact; The second question that came open to the meeting was how to gauge the non-compliance with the adjustment and the annual deviation allowed to the Member States.
On the first point, the Spanish presidency decided to establish a safeguard to guarantee that states continue to reduce their deficit. This established that governments should have the objective of reducing the deficit to 1.5% of GDP in case the public debt was greater than 90% and to 2% in case of a lower level of public debt.
Regarding the second point, the previous meeting was on the table that the European Commission would open an investigation if the deviation during a year was 0.5%.
The previous meeting, held on December 8 in person in Brussels, lasted for eight hours and the EU Economy and Finance Ministers were unable to overcome differences on the pace of adjustment that would be applied to countries with a deficit above 3 %.
Now it remains to close an agreement with the European Parliament no later than March so that the plenary session can approve it before the strike due to the elections.
