CChristian Lindner reacted irritably on Thursday. The federal government sees the intention of the EU Commission “extremely critical” to assess the budget plans of the member states for 2024 according to the rules of a reformed EU stability pact, said the FDP finance minister in Rome. The reason for Lindner’s anger is that the rules according to which the EU authority now wants to proceed are not yet on the table.
Logically, they are certainly not decided. The Commission is endangering confidence in an “open-ended negotiation process,” said the minister. From government circles it was said at the weekend that not only in Berlin but also in other capitals one was irritated.
The Commission mixed up two separate facts in a “very unfortunate way”: its regular budget policy advice to the states for 2024 and the still very sketchy discussion about the new budget rules, for which the authority has not yet presented a legislative proposal. Vice-President Valdis Dombrovskis and Economics Commissioner Paolo Gentiloni appealed to governments on Wednesday to submit their budget plans in April in accordance with the new rules in Brussels. So far, however, these rules have only existed in the minds of Commission officials – or in drafts that they have in their drawers.
She believes that she already has the Member States in her pocket
The governments’ displeasure is likely to be reflected in a declaration that the Eurogroup intends to adopt in Brussels this Monday. This was originally only intended to refer in general to the budget policies of the states this year and next. It is very likely that it will now also contain a passage in which the euro states object to the Commission’s intention to anticipate the forthcoming consultations on the reform of the pact with its specifications. As long as there are no new rules, the old ones apply, said an EU diplomat.
There is a simple reason why the Commission is pushing ahead: it believes that it already has the member states in its pockets. In the past few days, their negotiators have agreed on a consensus paper that the EU finance ministers want to adopt as official Council conclusions on Tuesday. Despite the irritation about the Commission, this agreement is apparently not in jeopardy. On this basis – and after approval by the heads of state and government in ten days – the EU authority can get started and present a legislative proposal. This is expected in April at the latest. The European Parliament and member states then discuss it. A compromise will not be available until the end of the year at the earliest.
The Council paper contains a number of formula compromises, as confirmed by Lindner in Rome. “We interpret the Council conclusions differently, which shows their absolutely preliminary character,” he said after talks with his Italian counterpart Giancarlo Giorgetti. At best, the member states had “reached a stage in forming an opinion”. In fact, the conclusions do not prejudge the legislation. However, the ministers make several preliminary decisions in the interests of the Commission, behind which they can no longer go back.
Measure against a “net spend path”
The reform of the pact primarily concerns the question of how countries with a debt ratio of more than 60 percent of economic output – currently 12 of the 20 euro states are affected – can permanently reduce their debt. The finance ministers are no longer questioning the fact that the Commission should negotiate bilaterally with the country concerned in the future. Furthermore, at the Commission’s request, the debt analysis will be integrated into a “multi-year budget” from the outset, i.e. it will be separated from the annual control that has been customary up to now. The multi-year plan no longer generally refers to the 60 percent criterion of the Maastricht Treaty, but starts with the debt level of the individual country and is intended to “differentiate” according to its financial possibilities. This means that the rules no longer apply to all countries, but that a heavily indebted country is treated less severely.