Plenary focus - May 2023

The proposed reform of the Stability and Growth Pact is just a new window-dressing exercise from the Commission. Under the name of more flexibility and national ownership of debt-reduction paths, sanctions are actually strengthened and EU countries will still have to comply with the same absurd fiscal rules - to converge towards 3% deficit and 60% debt-to-GDP. As usual, this will mean cuts to public services - schools, hospitals and trains - and more unfair structural reforms undermining social security. In short, austerity is once again around the corner and people will pay the price for it. The proposal is not better at making fiscal rules fit for addressing climate change, since they do not guarantee enough fiscal leeway for states to invest massively in the green transition like they should. But what is the point of a balanced budget on a burnt planet?

EU citizens deserve more than Olaf Scholz and his coalition blocking everything. They don't need a brake pad trying to force them into austerity. Olaf Scholz and the EU would be well advised to follow the left-wing government in Spain, which financed the higher costs of its citizens with a wealth tax, a real energy price break or an excess profit tax in 2022 and also achieved economic growth of 5.5%.