Listen to the audio version of the article
FROM OUR CORRESPONDENT
BRUSSELS Spain and the Netherlands, two governments that tend to be on opposite sides when it comes to European governance, released a joint document today, Monday 4 April, reiterating that the Stability Pact reform will lay down rules for should introduce public spending . The document will be presented at this afternoon’s meeting of euro area finance ministers in Luxembourg.
In what is essentially their paperless document, Madrid and The Hague argue that “converting mediumterm targets into a simple public spending rule would make the rules more understandable, easier to enforce and more countercyclical, especially when coupled with a clearly defined emergency clause to deal with extraordinary events who escape the control of governments.
At the same time, the two capitals argue with the need to adapt budget consolidation “to the specific situation of the individual countries”. Fiscal sustainability must be growthpreserving, include financial investments, but also structural reforms that are “credible and verifiable. In addition, the text goes on to say, “independent budgetary institutions should have a greater role.
The stance comes as member countries debate whether and how to extend the suspension of Stability Pact rules decided at the time the coronavirus pandemic broke out. Some governments are halfheartedly arguing that the war in Ukraine should prompt the European Commission to postpone a full return of fiscal rules now that a reform of the Stability Pact has been decided.
The board of directors is expected to make recommendations on this in the coming months. The joint document by Spain and the Netherlands also touches on other issues, including the banking union and the capital markets union. On the one hand, the member countries are apparently having difficulties agreeing on the third step of a tenyear project: the birth of joint and several deposit insurance. The other two elements represent surveillance and management. Both at European level. Madrid and The Hague’s decision to sign a joint document on such sensitive issues that have led them to take opposing positions in the past comes as only a partial surprise . A government has come to power in the Netherlands that is more open to new solutions at European level and ready to facilitate financial investments. In Spain, the establishment has always sought banks among the countries considered the most virtuous in terms of public finances.