The ongoing reform of the European Union’s fiscal rules has taken a new turn after Germany and the Netherlands came forward with demands for minimum debt reduction targets, directly challenging the European Commission’s approach based on tailor-made national plans.
EU law requires countries to keep their budget deficit below 3% of gross domestic product (GDP) and public debt below 60% in relation to GDP but many countries exceed those thresholds after years of intense spending to cushion the impact of the COVID-19 pandemic, Russia’s war in Ukraine and the energy crisis.
The European Commission argues this new economic reality warrants a reform of the bloc’s fiscal rules and has taken the first steps to revise the current framework.
Source : EuroNews
