BRUSSELS (Reuters) – European Union (EU) finance ministers are converging on the main principles of a reform of European fiscal rules, but crucial details remain to be negotiated, according to a document.

Draft conclusions from a Tuesday meeting of the EU’s 27 finance ministers show that member countries support much of the European Commission’s proposal presented last November, but its practical implementation remains a challenge.

“We need stable budgetary rules (…) adapted to the new realities,” Paolo Gentiloni, European Commissioner for the Economy, told reporters at the start of the meeting.

According to the draft, the current EU limit of 3% of GDP for budget deficits and 60% of GDP for debt would remain unchanged.

However, the most indebted governments could negotiate with the Commission individual debt reduction trajectories linked to reforms and investments, deviating from a single rule of annual debt reduction of 1/20th of the surplus above 60% of GDP.

While EU finance ministers agree on these points, they also disagree on many others.

The main stumbling block relates to the methodology of the Commission’s debt sustainability analysis.

Equally contentious is whether there should be numerical benchmarks for debt reduction that are common to all countries even as they negotiate individual tracks, and if so, what those benchmarks should be.

Other outstanding issues include the requirements of the new framework for countries that do not have major debt problems, how to define aggregate spending, exactly when a government should be granted additional time for debt reduction and how to enforce agreed plans.

Once finance ministers agree on the main principles on Tuesday and EU leaders approve them at the summit scheduled for March 23-24, the Commission will start drafting concrete proposals on the outstanding issues. .

(Report Jan Strupczewski, Augustin Turpin, edited by Blandine Hénault)

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