Its legislative proposals for the revision of the Stability Pact were presented commission. In their opinion, governments should ensure debt reduction within 4 years and its further reduction within ten years without additional steps.
A proposal that does not set a quantitative target for how much duty and requires separate negotiation with each member state, this may disappoint its largest country EUROPEAN UNION. V Germanywho wanted to set a minimum annual debt reduction target of 1% of GDP for each of the 27 EU countries.
The debt reduction will be the result of a four-year plan of reform, investment and fiscal measures to be agreed separately by the Commission and each government, and will target annual net spending as a key operating indicator.
Debt and deficit proposals
Under the proposal, countries with public debt above the limit set by the EU. (60% of GDP), they will be allowed to increase their annual net spending by less than medium-term GDP growth to ensure debt reduction.
The general government deficit, as per current regulations, must remain below 3% of GDP. If it is above this limit, it must decrease by 0.5% of GDP every year until it falls below the limit.
Deficit reduction, like debt reduction, must be achieved within a four-year period, and the measures used to achieve it must ensure that the deficit remains below 3% for 10 years thereafter without additional steps.
Exceptions
Governments may have more time to reduce debt and deficit levels, for example 7 years, if they implement reforms that increase financial resilience, stimulate growth or invest in areas that are EU priorities, such as the transition to a green and digital economy, social rights or security and protection.
The new rules are meant to replace the current Stability Pact, which was suspended in 2020 due to the coronavirus pandemic, climate change concerns and the war in Ukraine, and should come back into effect in 2024.
The Commission’s proposal is now to be discussed by the EU governments. and be subject to negotiations with the European Parliament.
Source: Kathimerini
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