2023-06-16 16:55:22
Friday, June 16, 2023, 4:55 p.m.
The Twenty-seven are aware that the tax rules in force until now must be renewed to adapt to the new challenges facing the European Union (EU). With the public debt and deficit skyrocketing after the Covid pandemic and due to the effects of the Russian invasion in Ukraine, the European Commission proposed in April a new framework of fiscal rules adapted to each Member State and requiring a minimum adjustment of 0 .5% of the deficit per year for those countries that exceed 3%. The initiative, which is still being discussed among European countries, still does not convince Germany, which demands a mandatory minimum reduction of 1% per year.
Despite the “enormous progress” of the Swedish presidency of the Council of the EU, positions on this file are still very far apart. Berlin demands a toughening of the Brussels proposal to bring countries whose debt exceeds 60% of their GDP and whose public deficit exceeds 3% to a halt. “We must carry out ambitious legislative work to achieve a significant and gradual reduction in public debt. For this, quantitative conditions are needed so that the application of the rules is solid. Without clear rules, the markets will not trust us,” German Finance Minister Christian Lindner stressed.
Other countries such as Spain, Portugal and France defend more flexible adjustment rules, which allow states to reduce debt and deficit without sacrificing economic growth. The Brussels proposal will also allow European countries to have a say in their adjustment plans. This regulation will continue to be discussed in the Council of the EU, which from July will be under the Spanish presidency and the German minister has shown his optimism at the prospect that the Spanish First Vice President and Minister of Economic Affairs, Nadia Calviño, will lead the negotiations: “If anyone can unite us all, it is her,” he said last week in an interview with several European agencies. Moreover, the ministers expressed their firm intention to reach an agreement by the end of the year.
#Germany #entrenched #reform #fiscal #rules #calls #minimum #annual #adjustment