Its Council of Finance Ministers EU (Ecofin), agreed today on key guidelines for the reform of the European economic governance framework.

“The pandemic crisis as well as the consequences of the Russian war against Ukraine have contributed to the further increase of already high debt levels, which must be reduced in a gradual and realistic manner“, the EU Finance Ministers state in their conclusions.

The areas of convergence between member states regarding a reformed economic governance framework are as follows:

The reference values ​​of the Stability and Growth Pact in 3% for the fiscal deficit and 60% for the ratio of public debt to gross domestic product at market prices, remain unchanged.

The economic governance framework should ensure that these benchmarks are met in a more effective, efficient and sustainable manner.

All Member States should present national medium-term fiscal-structural plans once a reformed economic governance framework is in place.

The national plans they should cover fiscal policy, reforms and investment.

The plans should set a national fiscal path determined by the level of net primary expenditure.

Member States should ensure a fiscal effort to put debt on a sufficiently downward path or to keep it at prudent levels, while maintaining the sustainability of public finances and promoting reforms and public investment.

The fiscal adjustment period could be extended if a member state commits to a set of reforms and investments that boost growth prospects and address the EU’s strategic priorities, such as public investment for the green and digital transition and strengthening defense capabilities.

For all Member States, national plans should ensure compliance with the deficit criterion or sufficient and reliable progress towards compliance in accordance, where appropriate, with any relevant Council recommendations.

The excessive deficit procedure for member states breaching the 3% of GDP threshold will remain unchanged.

For Member States with a public debt-to-GDP ratio above 60%, national medium-term plans should ensure that the ratio is sufficiently reduced. For Member States with a public debt-to-GDP ratio below 60%, but with public debt challenges, the national medium-term plan must ensure that the ratio remains at prudent levels.

For Member States with low public debt challenges, the fiscal path in the national plans should ensure that the deficit is reliably kept below 3% on an ongoing basis or sufficiently reduced to this limit, and that the debt ratio is kept at a prudent level, taking into account the need to ensure medium and long-term sustainability of public finances and to avoid undue debt accumulation.

Enforcement of the rules should be made more effective, including through greater transparency.

The common supervisory framework it should allow for the imposition of financial sanctions that will be less restrictive, but more realistic in their application.

EU finance ministers call on the European Commission, before publishing its legislative proposals (by April), to take into account the converging views of member states and to continue to work with member states in areas where additional discussions are needed.

Today’s conclusions on the reform of the economic governance framework should be adopted by the Spring European Council.

The Commission will then submit its legislative proposal in early April, with the aim of reaching a political agreement in the Council and with the European Parliament before the end of the current legislative period.