EU reaches agreement on reform of spending rules
European Parliament and member states finalize a deal on EU budget rule reforms, despite criticism and a two-year negotiation process
The European Parliament and member states reached an agreement early Saturday on the reform of EU budgetary rules aimed at boosting investment while keeping spending under control.
“Deal!” the Belgian Presidency of the Council of the EU said on social media platform X after 16 hours of talks.
? Deal ! @EUCouncil & @Europarl_EN reach a provisional agreement on the preventive arm of the economic governance framework #EGR.
? The new rules will help achieve balanced & sustainable public finances, structural reforms, foster investments, growth & jobs creation in the EU. pic.twitter.com/SDFwdvDcQ5
— Belgian Presidency of the Council of the EU 2024 (@EU2024BE) February 10, 2024
The EU spent two years making an intensive effort to develop reforms supported by the more frugal member states like Germany and other countries, such as France and Italy, which seek more flexibility.
Despite initial disagreements, particularly between Berlin and Paris, the 27 EU member states forged a consensus in December, setting the stage for the final round of talks with European Parliament negotiators.
Critics, especially from the left, have slammed the agreement for its complexity and potential to enforce austerity across Europe. However, the reforms are set to be adopted formally after approval by lawmakers and member states, with the new framework applicable to the 2025 budgets.
The Belgian presidency emphasized that the reforms aim to “achieve balanced & sustainable public finances, structural reforms, foster investments, growth and jobs creation in the EU.”
These changes introduce a more nuanced fiscal policy, maintaining the existing debt and deficit ceilings while offering countries more leeway to manage excessive deficits, particularly for investments in areas like the green transition and defense, including support for Ukraine.
The revised rules reflect a tailored approach, allowing each country to propose its path to fiscal sustainability, with a focus on expenditure trends rather than deficits, which are more susceptible to growth fluctuations.
Despite this flexibility, Germany and its allies secured provisions for a minimum reduction in debt and deficits across all EU countries, complicating the agreement.
Dutch MEP Esther de Lange, representing the center-right European People’s Party Group, praised the deal on X, stating, “We have ensured that the new fiscal rules are sound and credible while also allowing room for necessary investments.”
The reforms have garnered broad support within the EU, though they face opposition from the Greens, some members of the Socialist and Democrat groupings, and the radical left, who argue the changes could herald a return to austerity, hindering necessary investments in industry, defense, and ecological transition.
French S&D MEP Aurore Lalucq criticized the deal as a “political error,” warning it could fuel populist critique against Europe.
Source: Türkiye Today with AFP
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