Brussels-Eurozone finance ministers will begin discussions on Monday on how to change the frequently violated EU fiscal rules so that the government actually complies with them, eurozone officials said.
The European Union’s Stability and Growth Pact aims to prevent the government from borrowing large amounts of money to protect the value of the euro’s common currency. However, the rules are often ignored, some leading to the 2010 sovereign debt crisis, and few attempts have been made to apply fines to enforce the rules.
“The debate begins with the perception that sanctions are not being used so often. To be precise, it doesn’t help,” said a senior Eurozone official.
To ease financial markets when the debt crisis peaks, eurozone countries will more automatically impose excessive deficits and financial sanctions to carry out debt in 2011 and will not be subject to political discretion. I agreed to do so.
They also introduced the possibility of fines governments that have not dealt with other economic imbalances such as excessive balance gaps and surpluses.
However, despite continued violations of borrowing rules by France, Italy, Spain and Portugal, and Germany’s current account surplus has been prolonged, the European Commission has never moved to punish any country.
“After the financial crisis, much emphasis was placed on stronger enforcement, which is largely related to financial market turmoil and market pressure,” officials said.
“This time we live in a very different world and the overall form of the debate is different. It is not a way to strengthen enforcement, but a recognition of the specific lessons learned and new political priorities that have emerged. How to adapt the framework to accommodate it. “
After the COVID-19 pandemic, some eurozone countries also have large public debt that cannot be reduced to meet current requirements without causing economic recession, so new debt reduction rules are needed. is.
Some ideas include setting individual debt reduction paths for each eurozone country, rather than setting comprehensive rules for everyone.
“This time around, we recognize that the implementation of the rules depends on national ownership. There is a strong consensus on this, and much of the debate is on how to strengthen ownership,” said a senior official.
By Jan Strupczewski