The next two weeks will be critical to reforming fiscal rules. European Union, so-called Stability and Development Pact.

Next week, March 13-14, finance ministers they will meet in Brussels to discuss this issue as well as the reform of the Stability Pact. The key question for finance ministers is whether they can overcome differences between the governments of Berlin, Brussels and other countries and reach a set of conclusions. If they do, the EU leaders can discuss the conclusions at a meeting on March 23-24.

Gradual limitation of support measures for 40% of economically weaker EU citizens. with a total expenditure target of 1.2% of EU GDP. the reduction to 0.3% of European GDP achieved in 2022 is a key parameter of the “transitional” fiscal policy targets for 2024, published by the European Commission.

Both European Commission Vice-President Valdis Dombrovskis and Commissioner for Economic Affairs Paolo Gentiloni stressed that the guidelines for 2024, which will be determined for each country in May, represent a “bridge” from existing fiscal rules to the pact’s revised stability program, which is still under development. a consultation phase to enable Member States to develop revised programs for stability and development.

Decisive meeting of finance ministers next week in Brussels.

In the general guidelines, there are those that deal with debt and deficits for member states.

In particular, it emphasizes that debt should remain on the path of decline for member states with very high debt ratios such as Greece, Italy, Spain and Portugal, or remain at a “prudent level” for states with debt above 60% of their GDP. As for the budget deficit, the general direction is to reduce it to levels below 3% of GDP.

In the directives for 2024, the Commission emphasizes the importance of phasing out economic support measures to zero in the context of the energy crisis. Both Mr Dombrovskis and Mr Gentiloni have sought to limit the cost of support measures to the EU economy. from 1.2% of EU GDP to 0.3% of EU GDP, with the aim of creating incentives for energy conservation, faster fiscal policies in member states and a faster fight against high inflation, especially structural inflation, which is growing in Europe. Mr. Gentiloni stressed that given the decline in energy prices, support should be limited to 40% of economically weaker EU citizens. who needs help the most. The new elements of the 2023 guidelines also emphasize that Member States must be particularly diligent in continuing public investment programs. As characteristically highlighted, all Member States must continue to protect nationally funded investments and ensure that the Recovery Fund is used effectively, in particular for green and digital transitions.

In addition, the Commission says it will continue to focus on public investment in country-specific recommendations it will announce in May.