[FR] Euroquestions #32 | Reforming the European fiscal compact: Balancing consolidation and public investment needs
While there is broad consensus that the European budgetary framework needs to be reformed – it is too complex, too volatile and unsuited to the level of debt resulting from the Covid crisis – there are still many points of disagreement among policymakers on the future of the Stability and Growth Pact.
Should it be made more flexible to facilitate public investment in order to tackle the climate crisis and make European strategic autonomy a reality? Or should its application be made stricter in order to reduce Member States’ public debt in a less politicised manner? To manage the Covid-19 crisis, the European Commission has suspended European budgetary rules until the end of 2022. Following its review of EU economic governance launched in October 2021, it wants to propose a reform in the coming months to facilitate reform before 2023. The arrival of the new German government has intensified the debate among the 27 Member States. The reform of the European budgetary framework will be discussed at the Ecofin meeting on 25 and 26 February, ahead of the informal European Council meeting on 10 and 11 March, which will be dedicated in particular to this subject.
This Euroquestions will be an opportunity to discuss potential avenues for a political compromise on reforming the European budgetary framework. We will welcome Andreas Eisl, our researcher on macroeconomic and budgetary policies, public debt and investment, to address these issues.
