Henrike Hahn, Bavarian member of the European Parliament (The Greens/EFA), deputy member of the Economic and Monetary Committee and deputy speaker of the German delegation of the Greens, comments on today's communication from the European Commission on the reform of the Stability and Growth Pact:
“Finally the Commission is pushing ahead with the long-awaited reform of the debt rules. I am very pleased that the Commission is planning to introduce medium-term and country-specific debt adjustment paths and structural plans. The previous "one-size-fits-all" approach is unrealistic in view of the different budgetary and structural conditions in the member states.
The introduction of multi-annual adjustment plans in line with national legislative terms will also improve transparency and national ownership of budgets - which is a good thing. The integration of the budgets into the national energy and climate plans is also a positive step forward.
In terms of public investment, today's proposal is clearly too weak. Without decisive public investments in the coming years, achieving our climate goals is all but impossible. The Commission text also fails to recognize that climate risks will be one of the main drivers of future debt sustainability. We urgently need a debt sustainability assessment that takes into account inaction on climate change.”
Since the beginning of the Covid-19 pandemic, the debt rules in the EU have been officially suspended by the so-called general escape clause in order to give the member states the necessary financial leeway to fight the pandemic. According to the Commission, the escape clause will now be extended until the end of 2023 due to the difficult economic situation. A reform of the Stability and Growth Pact is particularly relevant before the start of the national budget negotiations for 2024.
I would be happy to answer any further questions.