The European Commission presented the main points for reforming the Stability Pact and growth of the Union. The rules will no longer be the same for everyone, but they will have a more articulated declination. Let’s go and see what are the axes on which the Commission has moved to review one of the fundamental rules of the European Union, in recent years increasingly at the center of controversy
Another 21 billion credited, Meloni: Pnrr opportunity not to be missed. WATCH THE VIDEO
The thresholds of 60% of the debt / GDP ratio and of 3% for the deficit remain, but each state will have its own dedicated plan for debt reduction, over a course of four to seven years. The twentieth rule has been eliminated (ie the reduction of the debt above 60% each year by the twentieth); the rules have been simplified (there will be no more annual Commission matrices or assessments but there will be a single indicator of net expenditure); the penalties will be lighter to make them more applicable (and will be applied more often).
The news of the stock market and economy of today 9 November
Failure to reduce the debt will also risk losing European funds, including those of the Recovery. The general safeguard clause that made it possible to suspend the rules of the Pact during the Covid-19 pandemic (until the end of 2023) remains in force. Finally, the ‘golden rule’ was not introduced to exclude green and digital investments from the mesh of debt.
The minister with the most Pnrr funds to spend is Salvini
The European executive has decided to adopt the Next Generation Eu model also for debt reduction. In essence, the States will be required to present plans (along the lines of the NRPs) for debt reduction. The first distinction will concern the current debt situation: states with substantial debt, those with moderate debt and finally those with little debt.
Countries with substantial debt (for simplification those over 90% of the debt but this will not be the only element of classification) will have four years for a debt reduction process (which can be extended to seven years). Moderate debt states will have three years. In any case, everyone will have to stick to the 3% deficit threshold. In practice, every state with debt above 60% of GDP must present a medium-term structural debt plan to be submitted for evaluation by the Commission and for approval by the Council.
The fiscal adjustment path will be set in terms of net primary expenditure, ie expenditure net of discretionary revenue measures and excluding interest expenditure and cyclical unemployment expenditure. For Member States identified with macroeconomic imbalances, the plans must also include reforms and investments to correct the identified imbalances.
The presentation of the plan is preceded by an in-depth technical dialogue with the Commission. The Commission then assesses the plan in an integrated way, taking into account the interactions between the budgetary trajectory, reforms and investments. The assessment takes place on the basis of a common EU framework and transparent methodologies, while retaining the possibility to seek additional information or request a revised plan. Thereafter, the plan is adopted by the Council on the basis of a positive assessment by the Commission.
The Council can adopt the plan or recommend the Member State to resubmit a revised plan. The Commission will constantly monitor the implementation of the plans. Member States will submit annual progress reports to facilitate effective monitoring and ensure transparency. If the plan is not implemented, sanctions will be triggered.
The excessive deficit procedure is maintained, while the excessive debt procedure is strengthened. The procedure will also be triggered when a Member State with a debt exceeding 60% of GDP deviates from the agreed spending path. The Commission will also use more effective financial sanctions by reducing their amounts and there will be stronger reputational sanctions. Not only. EU funding could be suspended even when member states have not taken effective measures to correct their excessive deficit.
The general safeguard clause remains in force (which made it possible to suspend the rules of the Stability Pact until 2024) and a specific clause is introduced for the suspension of national debt reduction plans which, however, will have to meet very strict criteria for the ‘application. The legislative procedure. The Commission would like to reach agreement on the quick topic proposal to get approval ahead of the Member States’ budget processes for 2024.
“Debt sustainability and growth go hand in hand. Our new Stability and Growth Pact will focus on what matters. We need a simple and transparent common framework and stronger ownership by member states,” is the comment on Twitter of the President of the European Commission, Ursula von der Leyen. “This Stability and Smart Growth Pact will deliver results, thanks to more accountability and stronger enforcement mechanisms,” she highlights.
“We only had initial discussions with the new government, we had more in-depth discussions with the previous government, but I have no doubt that Italy will make its voice heard in this discussion”, said the European Commissioner for the Economy. , Paolo Gentiloni. “What matters is that there is a trend of debt reduction. This is what matters and I believe this is also the interest of individual countries, I think there is an interest in a trend towards a credible, plausible reduction” of the debt, Gentiloni said.
“We see the ideas presented today as a first step towards the modernization of the Pact. We see several positive elements that are in line with the Dutch position, such as greater attention to the medium term, countries with high debt, investments and reforms. Likewise, increased national ownership must be accompanied by effective oversight to ensure sufficient progress towards debt relief, “said Dutch Finance Minister Sigrid Kaag.
Pnrr, Giorgetti: 21 billion against expensive bills