Calviño urges to end the Europe of “the trenches”

The first discussion of economy and finance ministers of the Eurozone on reform of the Stability and Growth Pact, which sets the deficit and debt limits that the Eurozone countries can incur, has ended this Monday with a positive message. “It has been a constructive debate. All the countries are aware of the need to look to the future, to get out of the old trenches, the dividing lines and the debates of the past, if we want to successfully face the green and digital transition together. It makes no sense to simply reapply the pre-pandemic rules & rdquor ;, the first vice president and economy minister has summed up, Nadia Calvino.

Brussels decided to suspend the rules of the pact as a result of the outbreak of the pandemic, in March 2020, to give governments spending room and avoid economic paralysis. With the return of growth, the idea on the table is to apply them again from 2023. Hence his intention to present a guide with budget guidelines for next year “in the coming weeks & rdquor; and “in the coming months” draw the appropriate conclusions from the open debate in the Eurogroup and present proposals to reform the rules.

“We have had a good discussion. They have presented their national positions and are aware that we need to reach an agreement in 2022 & rdquor ;, explained at the end of the meeting the president of the Eurogroup, pascal donohoe. “It has been a positive debate. Of course we have not drawn conclusions but I see areas in which we can build a broad consensus on the objectives of the review & rdquor ;, has valued the commissioner for economic affairs Paolo Gentiloni, in favor of focusing on breaking with the trend of the last ten years and avoiding repeating old debates. “We are facing a new situation. Due to the level of debt, which has increased as a result of the pandemic, and new due to the enormous need for investments that support the climate transition & rdquor ;, he said.

debt reduction

Meeting the dates will not be easy. The debate has so far generated a lot of division, with two clear blocks in the Eurozone. On the one hand, the countries of northern Europe, in favor of applying a stricter approach and, on the other, those of the south with Spain, Portugal, Italy or France in the lead, in favor of greater flexibility to favor growth. At the moment in capitals like Berlin, despite the change in government, they have not changed their discourse. “The Stability and Growth Pact has shown its flexibility during the crisis, but now is the time to rebuild the fiscal cushion. We need resistance, not only in the private sector, but also in the public one. That is why I am very much in favor of public debt reduction and this is one of the important details & rdquor ;, has warned the new German finance minister, Christian Lindner, who together with the Dutch minister sigrid kaas, was released this Monday in the Eurogroup.

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“I have not perceived any change in the German position either in this debate or in the banking union & rdquor ;, Calviño lamented that, on the contrary, he has seen a change of attitude in the Dutch minister in the face of a debate that “is not mature” and in which it will be necessary to “act with pragmatism” in the face of an obvious reality and that is that “there has been an increase in the debt-to-GDP ratios as a consequence of the response we have given to the pandemic & rdquor ;, warned the vice president who has highlighted also the preliminary positive assessment of the Community Executive on the labor reform, key to achieving the second disbursement of the recovery plan.

Despite the optimism with which Calviño has received Kaas, the Dutchwoman has assured that “frugality is always an asset & rdquor; although she has been willing “to meet everyone & rdquor ;. Meanwhile, Austria in its usual line has asked for rules stricter.