Spain and the Netherlands join forces to calm European budget rules

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.

The finance ministers of the euro, the eurozone and Spain and the Netherlands are meeting in Luxembourg this Monday to present a document provided by El País and Politico with access to elDiario.es, which they try to link with the south and Protected rigor.

Presenting the document at a news conference in Luxembourg, Spanish Vice President Nadia Calvinio said it was time to “leave the old debates and superstitions.” He added: “Countries and the continuation of traditional positions that have led to divisive debates and separated us from progress in recent years are now unproductive.”

For his part, Dutch Finance Minister Sigrid Kaag underlined the “moment of crisis and suffering” in which the two countries shared a common position: “There is no political sense here in spending energy and time on disagreements. On the surface, let’s focus on the common ground, build on the common ground, and show our citizens and taxpayers that the EU is truly more than just a domestic market, it is a society of values. ”

“East Paper Signed in the context of the response to the pandemic and the Ukraine war, and the fact that the two countries, Spain and the Netherlands, which traditionally have differing views on these issues, demonstrates the need for unity and determination. “A common challenge,” Calvino argued.

EU Commissioner for Economic Affairs Paolo Gentiloni acknowledged after the Eurogroup that he was “delighted to see this contribution from countries that are usually in different positions on these issues, with very interesting points”. A few kind words also uttered by Eurogroup President Pascal Donohe and ESM Klaus Regling. “We are grateful to Madrid and The Hague, but we should not expect this document to solve all the problems,” Gentiloni said, referring to issues between the 27th and the European Commission, such as the hypothetical investment rule outside gold. Budget rules because some countries protect green investments.

Thus, according to the document, 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.

“Achieving these goals requires ongoing economic reforms, high-quality public investment, and better public finance, so that debt reduction does not depend solely on budget consolidation,” the document said.

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 the green and digital ambitions: “The new framework should address the significant investment efforts needed to meet our ambitious commitments. . Green and digital transitions. ”

“Recent experience in the management of the Recovery and Sustainability Fund shows the potential to create a virtuous circle between national responsibility and implementation,” the text reads. Through, including through ambitious, credible and verifiable investment and reform commitments. He added: “When there is no accountability and compliance, the system should have clear mechanisms in place to ensure that the Commission and the Board take the necessary steps to enforce the rules.”