Luxembourg (EFE) relaxation of the same and the necessary requirements to reduce the public deficit and debt.
The German Finance Minister, Christian Lindner, arrived at the meeting in Luxembourg with the support of ten other capitals, reflected in a letter he published in several European newspapers to show that Berlin is not isolated in negotiations that the Twenty-seven want to end before the end of the year to apply already in 2024 the new Stability and Growth Pact.
“It is a declaration that Germany is not alone,” he told the media upon arrival at the meeting, before promising that “there are many member states that share” the position of his government and want to “work in the same direction.”
Said letter is also signed by the Czech Republic, Austria, Bulgaria, Denmark, Croatia, Slovenia, Lithuania, Latvia, Estonia and Luxembourg and in it they insist on the need for the new budgetary rules to include specific numerical objectives for the reduction of public debt ratios on GDP.
Germany proposes setting a mandatory annual debt cut
Berlin has demanded it since the beginning of the talks (it even proposes setting a mandatory annual debt cut of 1% for the most indebted countries), but that the European Commission partially introduced in the legislative draft through a cut in the public deficit of half a point each year.
“We need a multilateral approach, equal treatment, numerical targets and common safeguards. And not give the Commission much freedom to negotiate bilaterally with the Member States”, stressed Lindner, who also defended that the rules have to be “automatic”.
On the opposite side, his French counterpart, Bruno Le Maire, reiterated that Paris is opposed to having “automatic and uniform” rules, stressing that this is the “point that separates” member states that otherwise have “close” positions.
“It would be a political and economic mistake. We have already tried it in the past and it has led to recession, economic difficulties and loss of production and growth. It is the opposite of what we want, ”he said upon his arrival at the meeting.
France wants “firm and respected” rules
Le Maire assured that France wants “firm and respected” regulations, but also “intelligent” ones that leave room for investment.
In this sense, he appreciated that the Brussels proposal contemplates a differentiation depending on the situation of each country, provides that the States choose their fiscal path so that “it is not imposed from abroad” and recognizes the importance of reforms and investments .
Both Lindner and Le Maire found support for their theses in the public debate that took place at the meeting this Friday in Luxembourg, reflecting the complexity of a file whose negotiation will fall into the hands of the Spanish government as presidency from July of the EU.
For example, the German position was endorsed by the Danish minister, who stated that “a vital part” of the final agreement will be the inclusion of “more tangible debt reduction requirements” and even proposed that it have to go down every year “between 0 .5% and 1% of GDP”, depending on the situation of each country and also on the economic cycle.
In similar terms, other community partners such as Austria, Luxembourg, the Czech Republic or Estonia also aligned themselves with Berlin.
On the opposite side, the Italian minister, Giancarlo Giorgetti, called for “particular attention and treatment” in the new tax rules for those investments “considered as a priority” by the European Union, that is, those whose objective is to accelerate green transitions and digital.
Also in the investment chapter, Estonia, Latvia and Lithuania – signatories to the letter promoted by Lindner – as well as Poland demanded a specific treatment for defense spending given the increase as a result of the war in Ukraine, but without the need to exclude it. of the deficit computation.
Despite the individual demands from the start, the Twenty-seven share the objective of reconciling the reduction of debt levels triggered by the response to the pandemic and the war, with the need to leave room for investments in common priorities.
During the debate, the Spanish economic vice president, Nadia Calviño, highlighted that all the States have “a constructive and open tone”, which gives “confidence” that it is possible to reach an agreement before the end of this year “integrating all the contributions ”.