EU debt rules: Berlin and Paris see themselves close to an agreement
Time is of the essence: on Wednesday, all 27 EU finance ministers want to reach an agreement on the long-planned reform of the Stability and Growth Pact, for which a video conference has been scheduled. However, Germany and France have yet to reach an agreement in principle. After an overnight meeting in Brussels a good ten days ago, Lindner spoke of "92% agreement", while Le Maire put the figure at 95%.
According to Lindner, there were still some outstanding issues before the Paris meeting. He emphasized that Germany wanted "certainty that progress would be made every year in reducing the deficit and reducing the debt ratio". The exact figures on how this reduction should take place are still being discussed.
The EU had suspended its debt rules during the coronavirus pandemic to allow countries to receive billions in aid for the economy. Lindner said that if the member states reach an agreement this year, the reform could very likely be legally sealed before the European elections at the beginning of June. "That would be a great success for the European Union as a whole," he emphasized.
The so-called Maastricht criteria are to remain unchanged in the reform: a maximum annual new debt of three percent of gross domestic product (GDP) and a maximum total debt of 60 percent for each state.
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Before the scheduled video conference on Wednesday, Germany and France are still working on an agreement on the Stability and Growth Pact reform. Despite reaching a high level of agreement during an overnight meeting in Brussels, some key issues remain unresolved. According to Christian Lindner, Germany seeks "certainty" in reducing annual deficits and debt ratios every year. The French Finance Minister, Bruno Le Maire, also acknowledges the ongoing discussions. The EU suspended its debt rules during the pandemic, but if an agreement is reached this year, the reform could be legally sealed before the European elections. The reform will not alter the Maastricht criteria, with a maximum annual new debt of 3% of GDP and a maximum total debt limit of 60% for each state. The upcoming agreement between Germany and France is crucial for the European Union, as it could mark a significant success in addressing the EU debt situation.
Source: www.stern.de
