Although it was not on the agenda, the finance ministers of the European Union meeting yesterday near Stockholm wanted to present their first impressions after the presentation of the expected tax rules this week by Brussels. The community executive defended his proposal as "good and balanced" and is optimistic about the negotiations that want to be finalized before the end of the year. Of course, no one hides the difficulties, especially because Germany does not hide that it is not completely convinced by the plan.
The Commissioner for Economy, Paolo Gentiloni, boasted of his plan, and was "optimistic" about the fact that it will lead to the commitment of all countries, despite the fact that everyone has something to say on this issue. "This can usually mean that either we have a very good and balanced proposal or that we live on another planet; and we don't live on any other planet, so we have a very good and balanced proposal", he defended. In his opinion, the executive's plan has found the perfect balance between "solid finances and the need to boost growth". However, he was open for all to find a placement in the new plan.
The executive's proposal proposes fiscal paths for four years, in which each country will have to present national plans agreed with Brussels, reducing the debt if they exceed 60%. In the deficit, if it exceeds 3%, an adjustment of 0.5% will have to be made annually. The evolution of public expenditure will be used as the main indicator, but with room for investments so as not to stifle European competitiveness.
But Germany has already made it clear that it wants more rigor. The country's Finance Minister, Christian Lindner, has always defended a fixed debt reduction target (of 1% per year) and insisted that he wants "safeguards", but also assured that it will "always" be constructive. "I'm friendly, optimistic and polite," he joked when asked about the issue after writing a scathing op-ed in the Financial Times this week accusing Brussels of reducing the whole proposal to "a political negotiation" "The most important thing is that public expenditure does not grow above the GDP", he added.
Despite the constructive spirit appealed to by the liberal minister, and the intention shown by a large part of the countries that the new tax rules begin to apply in 2024, Lindner recalled that there are some previous rules, currently suspended . "As long as there are no new ones, the previous rules apply", he postulated.
However, the goal set is for an agreement to be reached at the end of 2023, that is to say, the bulk of the negotiation and closure would end in Spain's rotating presidency of the EU Council. On this point, the Vice President and Minister of Economic Affairs, Nadia Calviño, assured that the Government will do "everything possible" to achieve this or at least "advance" as much as possible.
Also the Dutch minister Sigrid Kaag, who showed the need to move forward with the new package, warned of the bad signals it could send to the markets ("they are watching", she stressed) if an agreement is not reached this year . "I'm not worried yet, but I'm worried that we're starting to discuss what we want to negotiate, instead of threading the needle," she warned. An approach that was also supported by the president of the European Central Bank, Christine Lagarde, who celebrated with "satisfaction" the new proposal because it favors a "sustained" debt reduction but also encourages investment.
At the same time, and while the ministers were meeting, Eurostat released the first growth data for the Eurozone in the first quarter of the year, which confirmed a 0.1% increase in GDP, which which removes the stagnation that was foreseen at the beginning. Gentiloni confirmed that the data are "better than expected" according to forecasts and particularly valued the growth of Portugal (1.6%) and Spain (0.5%).
