Brussels sets a spending path according to debt and leaves the 3% deficit ceiling
The European Commission has presented this Wednesday the general lines of its future reform of the fiscal rules, which mark how the fiscal path to which the member states will have to adhere will be set. Brussels proposes a path of net spending in the medium term that depends on the specific debt of each State for a horizon of four years, extendable to a maximum of seven. The public deficit limit is maintained at 3% and a whole battery of sanctions is proposed for countries that fail to comply with these new rules.
First, the financial crisis and, above all, the covid pandemic, have posed a real challenge for the Stability and Growth Pact and have led to questioning the suitability of continuing to maintain such strict rules in an environment such as the current one. The announced changes do not imply that bilateral agreements will be reached between the Commission and each Member State, but rather that each of the structural plans will have to receive the approval of the European Council.
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