The proposal to reform fiscal rules presented by Spain and the Netherlands to the Eurogroup on Monday has been warmly welcomed. The European Commission likes what the document says. “It’s going in the right direction”, said the Commissioner for the Economy, Paolo Gentiloni, at the end of the Eurogroup meeting on Monday, in which all the finance ministers of the euro area are represented. The Italian also acknowledged that the initiative had caused him some surprise – a pleasant surprise – due to the identity of the drafters: “Two countries that are usually in different positions [on economic issues]”.
Gentiloni contextualised that the decision to deactivate the escape clause of the Stability and Growth Pact was put on “pause” a month ago, pending the evolution of the situation after Russia’s military attack on Ukraine. He recalled that the decision to deactivate the escape clause was taken at the end of last year in a “situation of strong recovery of the economy”, when it was reaching pre-pandemic levels.
Yesterday, first vice-president and minister for economic affairs and digital transformation, Nadia Calviño, and the Dutch minister for economic affairs, Sigrid Kaag, said they consider it justified that European fiscal rules should continue to be suspended in 2023, in the context of Russia’s war in Ukraine.
“One can hope that the Commission may opt for an extension of the escape clause”, the Dutch minister pointed out at a press conference in relation to the rules of the Stability and Growth Pact that limit the public deficit and debt of the member states. They were deactivated by the pandemic and were scheduled to be reactivated in 2023.
A perspective shared by Calviño, who pointed out that they are still awaiting the European Commission’s proposal. A decision in this direction, Kaag pointed out, would be backed by the current circumstances and, according to Calviño, should not give rise to an “intense” debate.