Stability Pact, is a clash between Germany and France. Giorgetti: “Supporting growth and priority investments”

Clash between France and Germany on the reform of the EU Stability and Growth Pact. Paris raises the barricades against any automatism, while Berlin is asking for pre-established and equal numerical stakes for all, automatic indeed, looking above all at the most indebted countries. Meanwhile, Italy, with Finance Minister Giancarlo Giorgetti, makes public the request for a ‘golden rule’, an exception to the expected rule on spending trajectory, asking for “consideration” or “special treatment” for investments deemed priorities in the EU, “in particular those relating to the environmental, energy and digital transition”.

However, the Council of Economy Ministers in Luxembourg marked the official start of political negotiations on the new Stability Pact, following the proposal presented by the Commission in April. The goal is to reach an agreement for the autumn, in order to finalize the interinstitutional negotiations already by the end of the year, i.e. in time for when the clause that suspended the application of the rules at the beginning of the pandemic will expire, or in any case before the end of the legislature. “Time is not unlimited”, warned the European Commissioner for the Economy, Paolo Gentiloni. The Commission’s proposal is centered on medium-term spending plans that will have to be agreed by the States with the executive and will have to lead to a sustainable reduction of the debt in the long term.

Germany asks to review it by introducing a constraint to reduce not only the deficit (as proposed by the executive, by 0.5% per annum for those exceeding the 3% ceiling) but also the debt, which for the most indebted countries should fall by ‘1% a year. “It is not too ambitious to reduce debt to GDP by 1%,” reiterated German Finance Minister Christian Lindner. “If we want to keep the euro and the single market stable, if we want to remain competitive, we need fiscal rules that stabilize public finances”, Lindner said, calling for “common rules that are the same for everyone”.

On the contrary, the French colleague Bruno Le Maire, against “automatic and uniform rules in the Stability and Growth Pact”. “It would be an economic fault and a political fault,” he said. “We have already tried in the past to have automatic rules and uniform rules: it has led to the recession,” he warned. For its part, Italy is asking for a revision of the rules so that they take into account the need to support growth: “It is necessary to ensure the sustainability” of the accounts”, Giorgetti said, noting that the Pact is yes for stability, but also for “In our opinion, it is important – he added – that adequate attention is paid to investment policy, in particular investments that have been considered priorities at European level”, i.e. “those relating to the environmental, energy and digital transition”.

In other words those of NextGeneration Eu and Pnrr. “These are investments of limited duration and whose quantification has already been ascertained”, she underlined. If the focus of Italy’s intervention was on Pnrr investments, other countries recalled the importance of having rules that support investments and reforms, France above all, but also Spain, Portugal, Greece and Malta are in similar positions. From what filters through diplomatic sources, then, other states are also advocating a reform that also provides for a spin-off or a different consideration of investments in defense. In the meantime, the ‘frugal’ eleven of the ‘anti-debt’ letter published on the eve of the Ecofin on German impetus remain on the opposite front, to whose alignment Finland and Sweden can also be ascribed and – with much more moderation – Holland