We are putting forward something today that is long expected. We'v worked on this, as Valdis just recalled, since the end of 2019, beginning of 2020. There were then different crises, and postponements, but also a lot of work was done to build consensus within the Commission and to reach out to Member States.

After much hard work, we have now a good proposal on the table.

We worked to reconcile three different imperatives:

1. Supporting growth and enhancing debt sustainability
2. Strengthening national ownership and building a new common framework
3. Simplifying our rules and preserving their intelligence. 

And I believe we have succeeded in achieving a credible balance on each of those three fronts. I'm glad of the strong support that this proposal received from the College.

Today's orientations take into account the extensive public debate and consultations with stakeholders and Member States.

They sketch out a revised economic governance framework that we believe is fit for the challenges ahead and can give financial markets the confidence they need at this critical time for our economies.

Our proposal is inspired by the Maastricht spirit “whereby stability and growth can only go hand in hand”. This is what President von der Leyen said in her State of the Union speech. This spirit has not always been present among us.

We must finance massive investment needs, notably to support the twin transition, energy security, defence, our European competitiveness, and to avoid or face the risk of fragmentation that we have in the single market. And yet we also face a new reality of higher public debt. This means we need fiscal rules that both facilitate strategic investment and safeguard fiscal sustainability.

Let me set out how our orientations would enable us to achieve these goals.

First, the revised framework would increase national ownership by providing greater leeway to Member States in proposing medium-term fiscal-structural plans. These plans would outline the country's fiscal path as well as reform and investment commitments, reflecting EU as well as its national priorities. Once endorsed by the Council, the plans would orient the Member States' annual budgets.

Member States should ensure that their fiscal trajectories respect a common EU framework that has sustainable growth and risks to debt sustainability as a common basis. This common EU framework would ensure transparency and equal treatment between Member States.

The Commission would also put forward reference fiscal adjustment paths for Member States with substantial and moderate public debt challenges. Taking these as a starting point, Member States would design their own medium-term fiscal trajectories.

Crucially, as Valdis reminded us, Member States could also put forward a set of reform and investment commitments that could underpin a longer adjustment period and a more gradual adjustment path, so you are gaining time and graduality in the adjustment path. This would be subject to common and transparent EU criteria. The more reforms and investments proposed, the more gradual the debt reduction path can be. And from this point of view, we're building on the positive lesson learned of the RRF, which does not mean that we are repeating the same thing in all the texts, but this was a good lesson in relations with Member States.

Second, the revised framework should simplify the fiscal rules and focus on fiscal risks. This means differentiating between countries according to their public debt challenges. We know how different the levels of public debts are among our Member States, and we cannot ignore these differences.

Ultimately, what matters for debt sustainability and for the markets is that Member States reduce public debt ratios, especially when high, in a realistic, gradual and sustained manner. This is why we believe we should move away from the unrealistic requirements imposed by the 1/20^th debt reduction rule.

A single operational indicator based on the evolution of primary expenditure – net of new revenue measures – would be used for setting the fiscal adjustment path and carrying out annual fiscal surveillance. This would significantly simplify the framework and increase transparency.

Third, enforcement at the EU level would be strengthened as a counterpart to a more gradual and realistic reduction of the debt and to providing more leeway to Member States in designing their fiscal trajectories.

So there is a balance between these things: more gradual, stronger ownership, and enforcement.

Our Communication includes several specific elements that would contribute to better enforcement:

The debt-based Excessive Deficit Procedure would be made operational, by clarifying its activation and deactivation. Deviations from the agreed fiscal path would be the basis for enforcement actions, which would be calibrated depending on the gravity of the fiscal situation.   

The possibility of financial sanctions would be kept and made more credible by lowering the amounts involved.

Lastly, the deficit-based excessive deficit procedure would be retained, because overall it has worked, with its focus on the 3% threshold.

Of course, under the revised framework, robust escape clauses would still be needed to address really exceptional situations where rules-based policy cannot realistically be adhered to. In addition to the general escape clause for use in cases of severe economic downturn that you know very well, a country-specific escape clause would allow for temporary deviations from the medium-term fiscal path in case of exceptional circumstances outside the control of the government in question.

Our Communication also sets out as Valdis just said some orientations on the macro-economic imbalance procedure, which aim at increasing national ownership and commitment via an enhanced dialogue with the Member States. More specifically, we would strengthen the preventive role of the MIP by focussing more on new risks, allowing for an early detection of emerging imbalances. And when assessing the severity of imbalances, more emphasis would be put on the evolution of identified risks and the policy response by the Member State concerned.

With these detailed, carefully thought-through ideas on the table, we believe that we have a good starting point for the discussions among Member States to move towards a swift agreement on revising our EU economic governance. Of course, this is a pressing priority at the current critical juncture, in the current economic environment we are in, in view of Member States' budgetary processes for 2024, and in view of the deactivation of the general escape clause.

A thorough reform of the EU economic governance framework along the lines we have described would require legislative change. That is why we will consider tabling legislative proposals and provide guidance for the period ahead in the first quarter of 2023, of course following the process of discussion in the Council and among Member States.

Final message from me today: we want to put, at long last, growth and stability on the same level, and we want to work effectively for achieving results in both domains: reduction of debt, and sustainable growth. That is in essence the challenge we have before us.