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 the outcome of today’s Economic and Financial Affairs Council:
“With today’s orientations for the economic governance review the Economic and Financial Affairs Council has paved the way for a long-overdue Commission proposal on the reform of the debt rules. It is a good thing that member states have agreed to develop national medium-term fiscal-structural plans that address both fiscal policy as well as reforms and investments simultaneously. The previous "one-size-fits-all" approach has long misjudged reality in view of the different fiscal and structural framework conditions in the member states.
It is good that the Council endorsed the idea of multi-annual adjustment plans in line with national legislative terms. This will improve transparency and national ownership of budgets.
When it comes to public investment, the Council should be more ambitious. It is a good first step to give member states the opportunity to extend their fiscal adjustment period, if they commit to a set of reforms and investments, also in favour of the green transition. However, in light of the urgently needed public investments to tackle the climate crisis this will not be enough.
We have to make the needed investments in fighting climate change today to prevent unsustainable public debt in the future. Unfortunately, the Council fails to recognize that taking climate risks into account will be crucial for future debt sustainability. We urgently need a debt sustainability assessment that takes into account inaction on climate change.”
I would be happy to answer any further questions.