The PES welcomes the European Commission’s communication on the review of the Stability and Growth Pact as the start of an essential discussion on the future of the Union’s fiscal rules.
PES Commissioner for Economy Paolo Gentiloni today presented outlines for the reform of the EU’s rules governing public expenditure, the Stability and Growth Pact. The new rules will grant more flexibility to member states, in return for more enforceable debt management strategies.
The necessity of supporting businesses and families during the pandemic led to a sharp increase in public expenditure across the EU. Returning to the pre-existing fiscal rules is neither possible nor desirable, and will prevent investment in the green transition.
PES President Stefan Löfven, said:
“As restated in our Berlin Congress Resolution, the PES is committed to a progressive reform of the Stability and Growth Pact, to bring it up to date with the realities and necessities of today and to give member states more flexibility, accountability and ownership of their debt management, with retained demands for stability and sustainability.
“I commend Paolo Gentiloni on his hard work putting forward progressive, sustainable and balanced proposals for an economic governance framework adapted to the challenges of the 21st century. We look forward to discussing these in depth over the coming months.”
The Stability and Growth Pact’s general escape clause was activated in March 2020 in response to the Covid-19 pandemic, temporarily removing the requirement for member states to meet the deficit and debt rules. This suspension was extended twice and will remain in place until the end of 2023, by which point the Commission aims to have the new rules in place.
