The EU's spending rules, known as the Stability and Growth Pact, were suspended between 2020 and 2023. Photo: Ozan KOSE / AFPWith an energy crisis and record high inflation in the EU's rearview mirror, Brussels believes the time has come for the bloc to focus on ensuring sound public finances.on Tuesday. Once in place, each member state will be required to get national spending under control, but with built-in flexibility for investment.
The pact enshrines two sacred objectives, which remain in the reformed rules: a country's debt must not go higher than 60 percent of gross domestic product, with a public deficit of no more than three percent.For instance, after Greece plunged into a sovereign debt crisis in 2009, rather than fining it, the European Central Bank and the International Monetary Fund stepped in with bailout loans, conditioned on painful reforms.
They argued it hindered them from meeting the massive needs for the green and digital transition and rearmament in the face of the Russian threat.Under the new rules, each state will have to present a four-year plan to ensure the"sustainability" of their debt and how they will reduce the deficit to below three percent, in line with a trajectory formulated by the commission.