After three months of intense negotiations, the compromise proposal presented by the rotating EU Presidency, held by Spain, on the reform of fiscal rules is beginning to make its way among the Twenty-seven. The document sent by the vice president’s team Nadia Calvino satisfies Paris and Berlin “90%”, as quantified by the French finance minister Bruno Le Mairealthough the most frugal countries, with the German Christian Lindner At the head, they insist that there are “key” issues left to resolve, which predicts still negotiations ahead on Thursday night and throughout Friday.
“I hope the meeting is fruitful, we have warned the ministers that the night is going to be long and our objective is for there to be a political agreement at this Ecofin meeting” (on Friday), Calviño warned upon his arrival at the Eurogroup meeting which will be followed by a working dinner “without a closing time”. “We will dedicate the time necessary to reach the agreement,” he added about an agreement that is beginning to be finalized after months of complicated negotiations. “We know that there are still differences between Member States, but if the approach is constructive these differences can be bridged. “It is feasible to conclude these discussions today or tomorrow,” the vice-president of the Commission said hopefully. Valdis Dombrovskis.
Although the majority of ministers agree on the urgency of finalizing the new rules, the Italian commissioner Paolo Gentiloniestimated this Thursday at just “51%” the chances of success. “We need more ambition to combat excessive deficits. I am not so optimistic because there are open political and technical issues. The devil is in the details and we have to be very precise in what we decide,” the Finnish woman also warned Riikka Purrawhich defends “sufficiently strict but applicable” rules.
For Calviño, the fact that there is criticism from the frugal, with Germany at the head, and of the countries that defend greater flexibility, such as France e Italiaindicates that they are on the right path and that “the proposal of the Spanish presidency has found the good balance“, with a single monitoring indicator such as the spending path and with rules that are “easier to apply, more realistic, adapted to the economic reality we have after the pandemic and that guarantee sustainability in a way compatible with the investments we have to support in the coming years,” he said.
This balance is based on a good part of the numerical demands that Berlin had put on the table to guarantee that countries meet and reduce their ratios of deficit and debt: and Minimum average debt cut of 1% per year for countries that, like Spain, have a debt ratio greater than 90% of GDP (0.5% for countries with ratios between 60 and 90%); the commitment to establish a fiscal cushion (based on the requirement of a deficit of only 1.5% of GDP even for countries with imbalances of less than 3% to guarantee a budget margin in case of “shocks”) and a Minimum annual adjustment of 0.5% of GDP for countries with a public deficit greater than the 3% ceiling and subject to the excessive deficit procedure.
“Germany comes to Brussels today knowing that it is possible to reach an agreement and that we also have the will to reach an agreement. We have spoken very intensively in recent days and weeks, especially with our French friends and partners. We have taken great steps and it can be said that Germany and France “They now agree 90% on key issues,” said the German. Lindner for whom “there are still unanswered questions.” Among the obstacles to be resolved is, for example, the effort required of countries under excessive deficit procedure.
France calls for more flexibility
At the last minute, the Frenchman Le Maire has put a new red line on the table. France demands a additional flexibility of two tenths for countries with excessive deficit file. “We have agreed to maintain the excessive deficit procedure, a safeguard clause for the debt with a reduction of 1 point per year, a safeguard clause for the deficit of 1.5%,” Le Maire listed this Thursday, regarding all the concessions. than towards Berlin.
“I believe that France has made all the necessary moves to reach an agreement. It is proof that we want serious and convincing rules. But there remains a red line that France is not going to exceed,” she warned, demanding flexibility so that Member States can do more limited settings when they are under sanctioning procedure -predictably ten countries in 2024– to be able to continue investing in European priorities and making reforms. “It is a totally reasonable and responsible request. We do not want the ability to make Europe prosperous to be limited for 4 years. It would be counterproductive, an economic and political mistake,” he warned, insisting that the EU must maintain the incentive to invest so that Europe is not left behind in the innovation race against the United States.
Calvino, to the BEI?
Not only is an agreement on fiscal rules expected from the Ecofin meeting this Friday. It is also expected to put an end to the renewal of the presidency of the European Investment Bank, for whose position Calviño is fighting. Diplomatic sources assume that the Spanish vice president is the only candidate who has sufficient support and that this will be announced during the working breakfast this Friday by the Belgian finance minister, Vincent van Peteghem, who holds the presidency of the board of governors. of the EIB.
This Thursday the Eurogroup approved the recommendations by country on the budget plans for 2024. Like Brussels, Eurozone ministers urge Spain to send some new accounts as soon as possible and recommend a “prudent” fiscal policy, says the statement that calls on member states that still maintain “significant” energy support measures to eliminate them. gradually as soon as possible in 2024 and to use the money to reduce public deficits.
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