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Negotiators for the European Council and the European Parliament struck an eleventh-hour deal on the reform of the bloc’s economic governance framework early Saturday morning.
“The new rules […] will safeguard balanced and sustainable public finances, strengthen the focus on structural reforms, and foster investments, growth and job creation throughout the EU,” said Belgian Finance Minister Vincent Van Peteghem, who expressed satisfaction with the agreement.
The Council and Parliament had been struggling to reach an agreement on the revision of the framework, with many doubting a deal would be struck in time for a final plenary vote to be held on the text before Parliament breaks for the EU election campaign in late April.
The last-minute agreement saves the European Commission’s proposed reform of the framework, which aims to slash debt ratios and deficits while maintaining investment in “strategic areas such as digital, green, social or defense,” the Council said.
Under the terms of the agreement member countries will still be required to submit national medium-term fiscal structural plans to the Commission.
Those whose government debt exceeds the limit of 60 percent of gross domestic product, or where the government deficit exceeds 3 percent of GDP, will receive a “reference trajectory” — formerly known as a “technical trajectory” — from the Commission charting out a path to achieve “prudent” debt levels within four years. Governments will be allowed to request an extension of the four-year adjustment period to a maximum of seven years, if they carry out certain reforms and investments, according to the statement.
The provisional agreement must now be approved by the committee of member countries’ permanent representatives in the Council and the Parliament’s economic affairs committee before going through a formal vote in both the Council and the Parliament.
