The European Union reaches an agreement on new deficit and debt rules

The European Union reaches an agreement on new deficit and debt rules

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he Council of the European Union And the European Parliament They closed an agreement this morning on the new agreements Deficit and debt rules. The agreement between lawmakers to reform financial rules came less than two months after the political agreement reached by European Union finance and economic ministers on rules that limit deficits and debt.

Concluding an agreement with the European Chamber before March was essential so that the new rules could be approved in this legislature. In fact, both lawmakers were already aspiring to be able to conclude an agreement at the beginning of February so that the European Parliament could vote on it in the plenary session in Strasbourg before the elections. “The new rules will ensure some Balanced and sustainable public finances“It will strengthen the focus on structural reforms and encourage investment, growth and job creation across the European Union,” the Belgian Finance Minister said. Vincent van PetegemThis was stated in a statement by the Council, in which it celebrated the “balanced” agreement that will allow for its immediate implementation.

From the European Parliament, Socialist MEP from Portugal Margarida Marquez It highlights the case-by-case approach and flexibility of the new tax rules Prevent austerity policies.

What was agreed upon?

The new rules maintain financial goals that existed before the pandemic: a 3% deficit And one Debt is less than 60% of GDP. However, it provides individual four-year targets for each member state, taking into account each country's position. This period can be extended to seven years if countries pledge to implement the reforms and investments agreed upon by the European Commission and the European Union Net initial expenses With a control variable

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They also demand a minimum annual debt reduction of one percentage point to the level of… The most indebted countriesthose who have debt above one 90%. The adjustment will be 0.5% in the case of countries whose debt ranges between 60% and 90%. In addition, the agreement stipulates that countries with a deficit of less than 3% must continue to reduce it to 1.5%, with the aim of creating a fiscal margin to deal with potential crises.

Countries that exceed one threshold 3% deficit They will have to make a structural adjustment of 0.4% annually and 0.25% if the reduction path extends to seven years. The rules also provide for a transition period until 2027 to mitigate the impact of the higher interest burden.

It is not yet known when the new rules will begin to be implemented. The European Commission is studying whether it is possible to start implementing it in next year's budget.

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