The European Parliament adopted its negotiating position on EU rules on national debt and deficits by an overwhelming majority, despite Greens fears of bloc destabilisation and economic consequences.
After more than a year of negotiations, EU finance ministers in December agreed a joint position on reforming EU rules for national budgets, known as the Stability and Growth Pact. However, the proposal required approval from the European Parliament.
EU Economic Commissioner Paolo Gentiloni stated before the vote:
“The review of the economic governance framework has been a key commitment of this Commission, and the reform has long been due. We all know the limits of the old rules, that are the existing rules, in the current uncertain economic and geopolitical environment.”
Gentiloni also argued that the old rules imposed unrealistic budget cuts on member states and, as a consequence, failed to be implemented sufficiently.
Parliament decided to follow his call to act quickly, adopting its negotiating position without any amendments by an overwhelming majority: 431 votes in favour, 172 votes against and 4 abstentions.
Esther De Lange of EPP group, one of the two lead negotiators on the file, accused the Greens of being “strong supporters of the euro, but against the very rules needed to keep it strong and stable.”
Ahead of the vote, Greens co-chair Philippe Lamberts warned that the new rules would be “equally detrimental and equally unworkable” as the old ones.
This is sleepwalking Europe into a disaster.
Without an agreement to reform the rules, the old regulations will apply again from this year, as the European Commission has not extended the crisis-related suspension. It has allowed EU member states to take on more debt since the outbreak of the COVID-19 pandemic.
Finance ministers decided in December that countries with annual budget deficits of more than 1.5 per cent of GDP would have to reduce the shortfall by at least 0.4 per cent annually.
Belgium, which currently holds the presidency of the EU Council, wants the talks to progress fast: the first meeting will take place as early as Wednesday at 13:00, with Foreign Minister Hadja Lahbib saying:
Council’s position represents a delicate balance between all the member states. We know that there are only a few weeks left to conclude this file.
