The youth fiscal rules EU, they have to answer two simple questions: will they help her economy develop? Will countries follow these rules? Pact Stability and development did not score highly in any of the criteria. The clause that Member States maintain their annual deficit at 3% of GDP and the overall state debt up to 60% of GDP was earmarked and completely canceled during the pandemic: in March 2020 Commission one called “general escape clause”allowing countries to spend freely during times of crisis.

The exemption expires at the end of 2023. Because national governments control fiscal decisions, but interest rates and the euro’s reputation are everywhere, EUROPEAN UNION. decided that she needed protective shields to keep her members disciplined, even those who still kept their own currency.

Previous fiscal rules provided for sanctions at the highest level, but the competent authorities failed to implement them. In 2003, for example, EE avoided being fined by France and Germany for violating targets, and in 2019, threats to fine Italy 3.4 billion euros also came to nothing.

All parties agree that the rules must change, but not about what the new regime will look like or who will enforce it. In November, the Commission presented its vision and is due to submit a relevant bill in the coming weeks. WITH

according to preliminary data, the countries will present a four-year fiscal adjustment plan and coordinate its progress with the EU authorities. National governments may ask for more time to achieve their goals if they can justify the extra cost through investment and reform commitment.

Fiscal policy hawks are reluctant to give Brussels too much bargaining power and fear that target flexibility could lead to desired compromises.

The IMF and countries like Germany want at least some hard targets that European Commission it will not be possible to reflash. But accountability will not come from a Commission pointing the finger at every country. Similarly, EU finance ministers. suggested that smaller penalties might be more feasible, but that no real improvement would occur simply because the penalties were easier to accept.