Her proposal divides the countries of the Eurozone European Commission to restore fiscal rules in the EU, which have been suspended for three years first due to the pandemic and then the Russian invasion of Ukraine and a sharp rise in inflation, is dividing Eurozone countries. The proposal was discussed yesterday at the Eurogroup meeting, while today it will be re-examined by the Ecofin Council, i.e. the finance ministers of all EU member states. All the countries agree on the restoration, from 2024, of fiscal rules that will control deficits and debt, but disagree on how.

The main problem comes from Germany, which essentially wants to start the budgetary adjustment of the member states from the first half of 2023, through the submission of country-by-country recommendations by the European Commission. The German position is supported by some northern countries, such as the Netherlands, Austria and Finland.

A la carte deals?

On the other hand, all the countries that have high debt, such as Italy, France, Spain, Portugal, Greece and Belgium, citing the current geopolitical and economic uncertainty that exists, want the fiscal adjustment to essentially start from 2024, as proposed by the Commission. Disagreements also exist regarding the individual issues, which will, however, be examined later within the year, after detailed legislative proposals from the European Commission.

For example, the Germany wants them to stay in force the previous strict rules, obliging the member states, under the threat of sanctions, to achieve specific goals for the reduction of the debt, which will be determined by collective decisions of all the member states. On the contrary, the countries of the south agree with the Commission’s proposal, that there should be bilateral agreements with each member state for an “a la carte” adjustment, that is, based on the situation of each country and that more time be given.