The Ministers of Economy and Finance of the European Union will continue negotiations today to agree on the reform of the new fiscal rules that, after a four-year pandemic freeze, will once again limit the debt and deficit of the member states , after settling. the debate was inconclusive during the early hours of the morning, which lasted for about eight hours, until about 3 am.
Although “moderate” progress has been made and the agreement is “close”, further consultations are also needed from a political and legal point of view, as indicated by diplomatic sources to Europa Press, who added that the Spanish Presidency of The council will reflect this Friday on the next developments, including the possibility of convening an additional meeting of ministers.
In the meeting, which took place in a “constructive” atmosphere, according to diplomatic sources, the vice president of the economy, Nadia Calviño, explained to her colleagues the compromise proposal presented by the Spanish Presidency to the Council and which included a minimum annual debt reduction for countries whose debts exceed 60% of GDP, one of the recurring requests of countries such as Germany since the start of negotiations.
After Calviño’s initial explanation, the ministers took the floor to outline their priorities and differences regarding the text of the presidency in several rounds of contacts where different approaches took place with changes in first text of the Presidency.
The proposal requires an annual reduction of 1% of GDP for countries with a debt of more than 90%, as in the case of Spain, while it proposes an adjustment of 0.5% for debt partners between 60% and 90%.
It also introduced a ‘fiscal cushion’ for countries with small deficits but high debt, which it asked to reduce the deficit to have a 1.5% margin below the 3% limit to have room to meet the possible which are ‘shocks’. ‘ economic.
On the other hand, countries will be asked to exceed the reference value of the 3% deficit, where an excessive deficit procedure (EDP) will be opened, a “coherent” corrective net spending path with a minimum annual adjustment of at least less than 0.5 percent of GDP.
However, diplomatic sources indicate that the debate is now whether the change in the structure of the debt will include interest, while France is asking for “flexibility” in this figure, which it is asking to be lowered to 0.3% to leave and much room for reforms. investments because they assured that it was “the only point missing for an agreement” after an “extreme” negotiation between Paris and Berlin, protagonists of the main clashes.
Community sources also confirmed that ministers are aware of the “urgency” of agreeing on their position before the end of the year, as the new fiscal rules must continue their parliamentary process in it’s not yet the next European election and it’s a “shame” no. to reach this..
In this sense, although Calviño denied that he could conclude the reform this Friday, he indicated that he expects to have an agreement in the “next days”, including the possibility of calling an extraordinary meeting of the ministers of economy of Twenty-seven. after the summit on the 14th and 15th of December.