2023-09-16 17:09:20
The Spanish Presidency of the European Union considers that its work has already advanced enough to be able to put it on the table at the meeting of finance ministers (Ecofin) of October 17, a first consensus text between the 27 EU countries for the reform of the tax rules. This was announced this Saturday by the acting first vice president, Nadia Calviño, at the closing press conference of the informal Ecofin meeting that was held this Friday and Saturday in Santiago de Compostela.
Dombrovskis sees “the Santiago route” for the reform of fiscal rules as “a great challenge”
After that October meeting, the objective is to be able to close the possible pending issues in the Ecofin of November and start that same month dialogue with the European Parliament. The goal, according to Calviño, is that the new discipline rules for reduce the deficit and debt excessive of the European countries are underway “from 2024″ (the current rules were frozen in 2020, with the covid health crisis).
According to Calviño, the work carried out in recent weeks has made it possible to close all the technical aspects and clear the way to advance in the political negotiation of the most thorny issues in the coming weeks. “We have already achieved a consensus text of 70% of the text of the regulation”, has pointed out. In the remaining 30% lies, precisely, “the essential core” of the reform, where the opposing positions of the fronts led until now by Germany (on the one hand) and France (on the other) collide. “There has been unanimity on the need to move on to the political phase and seek that consensus before the end of the year,” said the Spanish vice president.
The vice president of the European Commission, Valdis Dombrovskis, He praised the “ambition” of the calendar proposed by Calviño, although he admitted that “it can be a great challenge.” In any case, Dombrovskis provided the support of the European Commission for the purpose of the Spanish Presidency that he himself, along the way, baptized as ““the way of Santiago” or the “fiscal path”making a nice nod to the Galician city where this Ecofin was held.
Double balance
The new fiscal rules will maintain the same objectives of the Stability and Growth Plan of a maximum public deficit of 3% of GDP and a public debt ceiling of 60% of GDP. But the aim is to pursue them in a more gradual, flexible and appropriate way to the circumstances of each country, as defended by the European Commission (in its April legislative proposal) and a group of countries, including Spain.
And here begins the clash with countries like Germany, that wants to put limits on that flexibility. Germany demands, for example, that countries with deficits and high debt adjust their deficit, at a minimum, at a rate of 1% of GDP each year.
This is one of the discrepancies that must be resolved political negotiation that the Spanish Presidency must channel to arrive on time at the end of the year.
The political negotiation must also make debt reduction compatible with the maintenance of the ambitious investments linked to the green and digital transition and the structural reforms promoted by the European institutions.
Achieving a “balance” in each of these two axes is the double objective that Calviño has assumed, facing the consensus text that he intends to put on the table of the Ecofin on October 17.
Although the process for appointing a new president for the European Investment Bank (EIB) has not been part of the official agenda of this informal Ecofin meeting, the political negotiations of the different candidates running for office have become a central topic of the conversations on the sidelines. This was so, above all, after the unexpected presence of the Danish candidate Margrethe Vestager, who is considered the main rival of the candidacy of Vice President Nadia Calviño in the race to occupy the presidency of the financial arm of the EU starting in January. of 2024.
Formally, on this issue, the Santiago de Compostela meetings have only served to inform the Belgian Minister of Finance, who currently chairs the conference of governors of the EIB, that he will open the round of contacts between the 27 before raising a vote on the candidates. This could occur on the margins of the Ecofín on October 17, in Luxembourg.
On their first day, the Galicia meetings ended on Friday with the agreement of a new governance mechanism to deploy the investment agenda known as ‘Global Gateway’ until 2027, with projects worth more than 45 billion euros in Latin America and Caribbean. In fact, Santiago de Compostela was the first meeting between Ministers of Economy and Finance of the EU and CELAC (Community of Latin American and Caribbean States). 47 Ministers of Economy and Finance from the EU and Latin America and the Caribbean participated, as well as representatives from the IMF, CAF and the World Bank.
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