New EU Rules on Public Finances
At the heart of the second of the two days of the informal summit of the Ministers of Economy and Finance of the European Union (Ecofin), underway in Santiago de Compostela, there is the theme of the reform of the Stability Pact, the agreement between the member countries that establishes common rules for public accounts: currently, a difference between annual expenditure and revenue (deficit or public deficit) not exceeding 3% of the total sum of workers' incomes and profits of the companies (i.e. gross domestic product, or GDP) and government debt below 60% of GDP. It is time to "move on to the phase of finding a compromise", said Nadia Calvino, Minister of Economy of Spain, a country holding the EU presidency this semester.
"We will see if more extraordinary Ecofin meetings are necessary," he added, setting the target in January 2024 for the entry into force of the new agreement, which "will necessarily have to find the right balance between the need to pursue sustainable debt reduction pathways while ensuring the necessary fiscal space for the necessary investments and structural incentives".
The European Commissioner for the Economy Paolo Gentiloni is optimistic about the outcome of the discussions: "I saw an awareness and a great deal of work of the Spanish presence", together with "a willingness of all countries to intensify" the work and a "willingness to compromise. I think these are very positive things." If member states ask for changes or corrections, "the Commission's proposal is open", provided that "the balance between "the objective of financial sustainability and that of promoting investment and growth, in a context of economic slowdown" is not changed.