Economy foresees an agreement on fiscal rules in the December long weekend

Spain, Germany and France are accelerating to reach an agreement on the reform of fiscal rules on the verge of the European Union deactivating, on January 1, the safeguard clause of the Stability and Growth Pact and the states must comply again To the deficit and debt limits, interrupted to deal with the pandemic, the energy crisis, inflation and the war in Ukraine. The Secretary of State for Economy and Business Support, Gonzalo García Andrés, has assured that the ministry continues to work so that the countries of the European Union reach this pact “in the coming days.”

Currently, the first vice president, Nadia Calviño, and her team are working on preparing the text of the agreement and must present the final document to hold the rotating presidency. The objective of the new rules will be to make the necessary fiscal stability compatible with investments that guarantee growth, García Andrés pointed out during his participation this Monday in a session on the Addendum to the Recovery, Transformation and Resilience Plan, which is collected by the EFE agency.

Calviño herself already acknowledged earlier this month that an extraordinary meeting may be necessary to debate this matter. Europa Press announced last week that this meeting would take place in the form of a working dinner and that it would be held on December 7, one day before the next meeting of EU Economy and Finance Ministers (Ecofin), scheduled for December 8th.

Sources close to the department confirm to this newspaper that at the meeting on November 9, important progress had been made that covered around 70% of the agreement. The main obstacle is the conflicting visions of Germany and France, which have also intensified bilateral negotiations. Thus, the final pact should combine Berlin’s intention to set specific numerical objectives for deficit and debt (a more orthodox approach) with those of Paris, which, like other southern European countries, demands that space for investment that avoids errors such as Those who caused the austerity policies promoted as a result of the last financial crisis.

It is known from the latest proposal that it plans to introduce safeguards by setting an average reduction in public debt so that countries with liabilities greater than 60% of their GDP can apply it in a given period of time. I would also ask those with a deficit below 3% to build in an additional margin of safety below that level to react to future crises.

For Spain, it would be important to reach an agreement on this reform within its presidency, since it could be another of the many in favor of the ‘number two’ of the Government, Nadia Calviño, in view of her appointment to the presidency of the European Investment Bank (EIB), the financial arm of the EU, which is expected to play a leading role in the design process of the European Next Generation funds.