The new Stability and Growth Pact rules agreed unanimously by EU member states are “realistic” and “balanced”, said Council President and Spanish Minister Nadia Calvino.

In a press conference, shortly after the end of the work of the extraordinary Ecofin Council held by teleconference, N. Calvino pointed out that the new rules ensure the gradual reduction of public debts and deficits, while maintaining the necessary flexibility for public investments in priority sectors, such as the green and digital transition, but also defense investments. The Minister of Finance of Spain also emphasized that the new rules for debt reduction take into account the specific characteristics of each country individually and that member states should set targets for reducing their fiscal deficits below 3% of GDP . Nadia Calvino also noted that the new rules foresee a “transitional period” until 2027, during which the increase in the cost of debt associated with high interest rates will be taken into account. This temporary flexibility clause was reportedly requested by France and supported by Italy, as a trade-off for concessions on greater fiscal discipline demanded by Germany and other “austere” countries.

For his part, Commission Vice-President Vladis Dombrovskis stressed that there is no time to lose and today’s political agreement in the EU Council should pave the way for the start of negotiations with the European Parliament. The deal should be finalized as soon as possible so that the new EU fiscal rules come into force before the 2024 European elections.

“Given the significant economic challenges we face, we must have this new economic governance framework that ensures fiscal sustainability and sustainable and inclusive growth,” said V. Dombrovskis. This will be achieved, based on the new rules, through stronger ownership of medium-term fiscal programs by member states, but also through the enforcement of fiscal targets and incentives for investment and reforms, the Commission vice-president said.

It is noted that today’s emergency Ecofin conference call that reached an agreement on the EU’s fiscal rules, completed successfully within two hours. According to information, the agreement had already been reached last night between French Finance Minister Bruno Le Maire and German Finance Minister Christian Lindner on the details of the reform.