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EU Stability Pact: Parliament votes for reform
"EU Parliament adopts new debt rules after long dispute. Find out how the reform of the EU Stability Pact affects national debt and what effects it has. An important step for the EU economy."
EU Stability Pact: Parliament votes for reform
After a long dispute, the European Parliament approved the reform of the EU Stability Pact. This reform represents the fourth major overhaul of the regulatory framework and aims to improve the handling of public debt. The reform means that the unchanged Maastricht limits for new debt and the debt ratio will remain in place, while the EU Commission will have more power to negotiate debt reduction with each member state individually.
The final vote resulted in a narrow majority for the compromise, with the EPP group and the liberal Renew group united behind it. Other groups, including the Greens, mainly rejected the compromise. They argued that the new debt rules would discourage investment. Nevertheless, additional provisions were introduced that allow more public investment in green and digital transformation.
The new rules stipulate that the EU Commission will negotiate debt reduction plans with each country individually, which are designed for a legislative period of four or five years. Countries with a high debt ratio must reduce their debt by a certain percentage each year, while generally reducing the structural deficit. The compromise has both positive and negative aspects, but overall the threat of abolition of the pact was averted. It now remains to be seen how quickly the new rules will be applied and how the Member States will react to them.