One is a liberal and the champion is self-proclaimed. The second is the Progressive and Southern Coalition Government. The Hague and Madrid; Mark Rutte and Pedro Sanchez. Indeed, the Netherlands and Spain, historically opposing countries in the EU because of their different ways of seeing economic responses to each crisis – the 2008 financial crisis; That pandemic; That the energy crisis – now agreed on a non-paper, a document outlining their position on an open debate in the EU: fiscal reform, budget rules suspended for two years due to coronavirus health. Economic and social crisis.
This Monday, the finance ministers of the euro, the Eurogroup and the Spanish and Dutch finance ministers are meeting in Luxembourg to present a document the contents of which were provided by El País and Politico, in which they seek to combine the flexibility advocated by the South. With the rigor supplied by the North.
Thus, according to the published draft, Madrid and The Hague argue that “in the context of higher debt levels” more “country-specific” and “realistic” consolidation strategies are needed. Spain’s Nadia Calvino and the Netherlands’ Zigrid Kaagi will present a document on Monday proposing changes to a set of rules governing how EU countries should reduce their debt and obliging the EU to set specific goals for each country.
Currently, fiscal rules dictate the rate of debt reduction by 1/20 per year, which in the past served fiscal reduction and sacrifice. Since many EU countries now owe more than 100% of GDP, returning to that 60% target at this rate would mean a drastic budget cuts that would push countries like Spain into a new recession.
In this context, Spain and the Netherlands agree to change this reference point. Of course, with the North Gesture, the document protects the construction of fiscal buffers to “prepare for the next shock” and a greater room for maneuver for nationally designed stability programs.
Madrid and The Hague argue that “high quality public investment” and “significant investment efforts” are needed to meet green and digital ambitions, which, according to Politico, suggest that investment should be treated differently from other costs in deficit calculations. .
Source: El Diario
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