EU debt rules: austerity in disguise.
The European Commission published their proposals to reform the EU’s fiscal rules from 2024
The EU debt rules have long been in need of a serious reality check. However, the Commission prefers to indulge in fiscal fantasy and domination. It is sticking to the public debt ratio limit of 60% and 3% for the budget deficit. These limits are completely arbitrary, without a clear economic basis, and are simply unachievable for most EU countries.
“The proposal for the revision of budgetary rules keeps nonsense debt and deficit limits. It’s an attack on democracy and the rule of Law”, MEP José Gusmão says. MEP Manon Aubry underlines: “Stricter rules and more sanctions : under the disguise of a reform, the Commission paves the way for a powerful comeback of austerity. We simply cannot accept that states remain tied by absurd and counter-productive fiscal rules whereas what they actually need is more leeway to invest in public services and the ecological transition.” “The proposals are inadequate to address the needs and conditions faced by the Member States, especially by those with high public debt, and fail to provide answers to the asymmetries between them. What we need is a radical reform for a new Sustainable Growth and Employment Pact that does not repeat the mistakes of the past that led to failure and imposed austerity”, MEP Dimitrios Papadimoulis adds. “The EU cannot permanently tie itself to the short leash of financial market lenders. Debt brakes and debt bouncers should be abolished altogether. Instead, we need an EU pact for a future-oriented and crisis-proof fiscal policy in the fight against inequality and climate change. We need investments for modern primary schools and wind turbines. We need to be able to eliminate social imbalances and poverty. We need flexible stimulus and aid programmes to deal with the crises of our time”, MEP Martin Schirdewan states. MEP Mick Wallace concludes: “The Stability and Growth Pact was a disaster for the people of the EU. It imposed years of prolonged economic hardship, stagnation and cuts to the public sector across Europe, as it hampered the capacity of individual member states to take best care of those most in need. This pact has enshrined austerity and neoliberalism in the EU and belongs to dustbin of history…These new reforms are simply this austerity repackaged.”
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