FILE PHOTO: Spain’s Economy Minister Nadia Calvino speaks as she arrives for a Euro zone finance ministers meeting in Luxembourg, October 4, 2021. REUTERS/Yves Herman
February 7, 2022
MADRID (Reuters) -Spanish Economy Minister Nadia Calvino suggested on Monday that each European Union member state should set its own fiscal targets in the future instead of having common goals defined by the bloc’s fiscal rules.
“For the future, member states must play a leading role in setting their own fiscal targets,” Calvino told an event in Madrid she was attending alongside her Irish counterpart and Eurogroup head Paschal Donohoe.
EU countries are currently discussing a change to the fiscal rules, officially called the Stability and Growth Pact, that limit government borrowing to protect the value of the common euro currency – shared by 19 states.
The rules have been suspended since 2020 to give governments leeway to fight the COVID-19 pandemic.
With growth now back on track, the rules were to be reinstated from the start of 2023. The discussion focuses on the need to acknowledge the EU’s new economic realities – the high post-pandemic public debt, wide deficits and the need for huge public investment to fight climate change.
The issue is politically divisive as EU countries with more fiscal discipline are wary of their more profligate partners.
Calvino acknowledged there is a need to reduce governments’ indebtedness, but not at the same pace everywhere, and said she wants rules that are easier to understand and more acceptable for citizens.
“We need to ensure that we absorb the extra debt we took to respond to the pandemic in a manner which is compatible with growth and compatible with job creation,” she said.
(Reporting by Inti Landauro, editing by Andrei Khalip and Mark Heinrich)
Source: One America News Network
