June 16, 202321:33
Italy calls for exception to pending spending trajectory rule, especially for investments deemed a priority in the EU
It is clash between France and Germany on the reform of Stability pact and growth of the EU. Paris says no to any automatism, while Berlin is asking for pre-established and equal number limits for all, automatic in fact, looking above all at the most indebted countries. Meanwhile, Italy, with Finance Minister Giancarlo Giorgetti, makes public the request for a temporary “golden rule”, an exception to the expected rule on the spending trajectory, asking for “consideration” or a “special treatment” for investments considered priorities in the EU, “in particular those relating to the environmental, energy and digital transition”.
However, the Council of Economy Ministers in Luxembourg marked the official start of the political negotiations on the new Pact, following the proposal presented by the Commission in April. The goal is to reach an agreement for the autumn, in order to finalize the interinstitutional negotiations by the end of the year in time for when the clause that suspended the application of the rules at the beginning of the pandemic will expire, or in any case before it conclude the legislature.
Germany’s proposal “Time is not unlimited”, recalled the European Commissioner for the Economy, Paolo Gentiloni. The Commission’s proposal is centered on medium-term spending plans that will have to be agreed by the States with the executive and will have to lead to a sustainable reduction of the debt in the long term. Germany asks to review it by introducing a constraint to reduce not only the deficit (as proposed by the executive, by 0.5% per annum for those exceeding the 3% ceiling) but also the debt, which for the most indebted countries should go down by ‘1% a year.
And that of France On the contrary, France is against “automatic and uniform rules in the Stability and Growth Pact. It would be an economic fault and a political fault”, explained Paris. “We have already tried in the past to have automatic rules and uniform rules: it has led to the recession,” warned Finance Minister Bruno Le Maire.
The position of Italy Our country, for its part, is asking for a review of the rules so that they take into account the need to support growth. “It is necessary to ensure the sustainability of the accounts”, said Giorgetti, noting that the Pact is about stability, but also about growth. “In our opinion, it is important – he added – that adequate attention is paid to the investment policy, in particular investments that have been considered priorities at European level, those relating to the environmental, energy and digital transition”. In other words those of NextGeneration Eu and Pnrr. “These are investments of limited duration and whose quantification has already been ascertained”, he underlined.
If Italy’s intervention was on the investments of the Pnrr, other countries have recalled the importance of having rules that support investments and reforms, France above all, but also Spain, Portugal, Greece and Malta are in similar positions. From what filters through diplomatic sources, then, other states are also advocating a reform that also provides for a spin-off or a different consideration of investments in defense. In the meantime, the ‘frugal’ eleven of the anti-debt letter published on the eve of the Ecofin on German impetus remain on the opposite front, to which Finland and Sweden and – with much more moderation – Holland can also be ascribed.