“Parliament is a step closer to providing its contribution to the public debate on the EU economic governance review”, said the lead MEP Margarida Marques (S&D, PT), after her report was adopted by the ECON committee with 38 votes to 6 and 12 abstentions.

The report says that the EU’s economic governance framework needs to be reviewed, prior to deactivation of the General Escape Clause, which allowed member states to deal adequately with the crisis, while departing from the budgetary requirements that would normally apply under the European fiscal framework.

The review must not undermine the economic recovery by prematurely suggesting a withdrawal of support, MEPs stress,but it should strengthen a sustainable, inclusive, green and digital recovery by contributing to the European Green Deal and to the implementation of the European Pillar of Social Rights. It should also consider differing situations across member states and counteract macroeconomic imbalances.

Monetary and fiscal policies

The report underlines the importance of interaction between monetary and fiscal policies and calls for favourable financing conditions and support for firms, workers and people to be preserved. At the same time, MEPs highlight the importance of sustainable fiscal policies, as well as debt and deficit trajectories that ensure credible paths to reducing debt, including a country-specific pace of sovereign debt reduction.

Finally, MEPs recall that the European Semester is a well-established framework to coordinate the budgetary, economic, social and employment policies across the European Union; supporting the EU’s long-standing goals of sustainable growth, and sustainable public finances. They point, however, to the lack of national ownership as one its main weaknesses and call for the Parliament to be more involved in the European Semester process.