Many of the fiscally conservative states hoped Germany would join their call to implement a rigid EU austerity policy when Christian Lindner of the liberal FDP party took over Germany’s finance ministry. However, the FDP-led ministry has shown it is willing to compromise on reform.
Eight EU countries known as “the alliance of responsibility” who
spoke out in favour of an early return to strict debt rules in a
position paper in September 2021 are being pushed towards compromise
with even Germany adopting a more conciliatory tone. EURACTIV Germany reports.
While these member states, including Austria, Scandinavian member
states, the Netherlands, and the Czech Republic, still insist on sound
public budgets, there is no longer any talk of an immediate return to
the previous, strict rules. Instead, a broad consensus for the need for
reforms seems to be emerging.
“We have learned the lessons of past mistakes when we were too quick
to restore public finances and destroyed growth in the process,” French
Finance Minister Bruno Le Maire said on 18 January during a press
conference in Brussels.
“Nobody is asking today that we immediately return to strict budget rules,” he added.
Germany’s key role
Many states in the fiscally conservative alliance had hoped Germany
would join their call to implement a rigid EU austerity policy when
Christian Lindner of the liberal FDP party took over Germany’s finance
ministry.
However, the FDP-led ministry has shown it is willing to compromise on reform.
For example, at last week’s meeting of EU finance ministers, Lindner
stressed that Germany was “open to progress and further development” of
the rules.
The finance ministry’s parliamentary state secretary, Katja Hessel,
also stressed that the Stability and Growth Pact reform was an
“important goal” that “we want to implement together with our
neighbours.”
While Hessel said that Germany would continue to advocate for “sound
and sustainable” finances at the EU level, she also stressed Germany’s
“mediating role” in the debate.
“A reform of the Stability and Growth Pact should also ensure that
future investments for the modernisation of the EU can be financed,”
Hessel told EURACTIV.
Spearheaded by Austria, eight EU member states pushed against the
loosening of EU fiscal rules ahead of a meeting of EU finance ministers
this weekend.
“Together with other European colleagues we are pleading for a return to a sustainable budgetary policy …
The fiscally conservative
A change of direction also seems to be emerging in the Netherlands,
which also joined the fiscally conservative allliance and is often
branded as one of the EU’s so-called ‘frugal’ states.
The coalition agreement of the newly elected Dutch government speaks
of a “constructive dialogue” that the Dutch want to enter to reform the
Growth and Stability Pact. The reform proposals put forward by the EU’s
southern member states “in an unbiased and open manner” will be
discussed by the new government, a spokesperson told EURACTIV.
Sweden and Denmark are also showing restraint in the debate. “It is
important to have a broad debate on this in the EU and to take time to
think about how to proceed,” Sweden’s finance ministry has said.
Austria is the only country that currently remains stubborn on the
matter. At last week’s meeting of eurozone finance ministers, Austrian
Finance Minister Magnus Brunner pleaded for a “return to stricter rules
when the crisis is over....
more at EURACTIV
© EURACTIV
Key
Hover over the blue highlighted
text to view the acronym meaning
Hover
over these icons for more information
Comments:
No Comments for this Article