In the final phase for the reform of the stability and growth pact the European institutions enter, as negotiations begin today, with the aim of reaching a final agreement until mid-February.

Today the European Parliament decided to start talks with the Council on the new economic governance rules. The text, approved by MEPs with a large majority of 431 votes in favor, 172 against and 4 abstentions, is the European Parliament’s mandate for negotiations starting today with the member states on the final form of the legislation.

The Commissioner for Economy, Paolo Gentiloni, he welcomed this “important” and “positive” step, stressing that the timescales for a final agreement are very tight. In particular, he said that the agreement should be reached in the first fortnight of February if we want the legislative process to be finalized before the end of the current legislative period. As he explained, as the European elections approach and after the recent deactivation of the General Escape Clause, “it is important and urgent to finalize clearly the new rules for fiscal policy”.

He also added that in today’s uncertain economic and geopolitical environment, the goal is “the new rules allow for the gradual reduction of debt, while leaving room for the massive public investment Europe needs to successfully address the challenges ahead.”

The rules of the new Stability Pact could come into force as early as the 2025 financial year, but time is very tight. P. Gentiloni said that this is something that will be decided in the coming weeks, but what is important is to reach a compromise. He admitted that there are different positions on important issues between the European Parliament and the Council and stressed that in the negotiations starting today between the Parliament and the Council, the Commission will make every effort to reach an agreement.

During the debate preceding the vote, in the Plenary of the European Parliament, one of the rapporteurs of the mandate for the negotiations with the Council, Esther De Lange (EPP, Netherlands), emphasized that the text voted by the MEPs introduces some room for flexibility, in particular to enable necessary climate investments, but also based on sustainable economics to avoid burdening future generations with excessive debt.

Socialist co-rapporteur Margarita Marques (Portugal) said the European Parliament’s proposal offers a strong social dimensiongreater flexibility in debt management and incentives for investment in the EU’s main priorities, such as climate, digital technology, defense and social sectors. “Our priority now is to reach a final agreement in time to avoid a return to the current and ineffective fiscal rules and to implement a new framework that prevents a return to austerity policies.”