Spain hopes to present a first proposal for fiscal rules in October

2023-09-15 18:22:30

With the European economy moving forward at full speed, the agreement to reform fiscal rules is more important than ever. This was highlighted by the Commissioner for Economy, Paolo Gentiloni, at the informal meeting of the finance ministers of the European Union (Ecofin) in Santiago de Compostela this Friday. “It is urgent. “We must ensure that fiscal policy underpins the monetary policy work of the European Central Bank (ECB) to contain inflation,” he said. Brussels has applauded the efforts of the Spanish presidency of the Council of the European Union (EU), which according to diplomatic sources will present a first proposal on October 17.

Since Spain held the rotating presidency of the EU, “we have closed parts of texts,” said the first vice president and Minister of Economic Affairs, Nadia Calviño. After four years in which the demands to reduce the public deficit to below 3% of GDP and a public debt that does not exceed 60% have remained frozen, the minister has shown her confidence in being able to resolve the differences by the end of the year. .

The European Commission’s initial proposal includes tailored plans to bring countries with excessive debt and deficits into line. It also includes a minimum fiscal adjustment of 0.5% of GDP per year. Germany has been especially critical of this point, since it considers that the adjustment should be greater and is committed to setting it at double (1%).

Search for consensus

But there has been one issue that has not been on the table. Calviño has been categorical in stating that she would not discuss with the rest of the ministers her candidacy to preside over the European Investment Bank (EIB), a position for which she competes with the Competition Commissioner, the Danish Margrethe Vestager.

The Belgian Finance Minister, Vincent van Peteghem, has reported that the process is in the “consultation phase” in order to see who can obtain the necessary support (the favorable vote of 18 Member States and 68% of participations of the EIB, where the opinion of Germany, France and Italy has greater weight). «We are looking to see if the requirements are met to achieve a consensus candidate, but we are not at that point yet. “We should not force the process,” he stressed.

The Portuguese Minister of Economy, for his part, has shown his support for Calviño’s candidacy and the French Finance Minister, Bruno Le Maire, has highlighted that he “firmly” believes that the Spanish candidate “has all the necessary skills” for the post. Despite everything, Le Maire recalled that this issue “must be discussed among all ministers before making a final decision.”

The meeting this Friday and Saturday in Santiago de Compostela is – in the words of the Spanish vice president – ​​“historic”, since it brings together European ministers with their counterparts from Latin America and the Caribbean; and in which the main multilateral financial institutions of the region will also be present. “We have discussed how to launch the Global Gateway initiative with concrete projects, with which we want to invest 45 billion euros in the region,” Calviño stressed.

Eurozone countries have also supported the nomination of Italian Piero Cipollone to succeed Fabio Panetta on the ECB executive committee, a process that was a mere formality, since there was only one candidate to fill the position. The current deputy governor of the Bank of Italy must receive the approval of the European Parliament and the Member States for the decision to be final.