Stability and Growth Pact: greater flexibility towards fiscal stability while securing efficient public spending

The Renew Europe Group welcomes today’s European Commission proposal for a review of the Stability and Growth Pact, a set of rules, suspended since 2020 and to be reactivated in 2024, intended to ensure that EU countries pursue sound public finances and coordinate their fiscal policies, while building confidence in the markets on the economic solidity of the Union.

In light of the events of recent times, such as the Covid19 pandemic and the subsequent unjustified Russian aggression in Ukraine, Renew Europe supports a review (not its complete overhaul) of the European economic governance model in order to make it fit for the current exceptional challenges and to enhance EU´s capacity to act in an increasingly volatile geopolitical context.

In this regard, our political group upholds the Commission's proposal to set debt targets adapted to the economic situation of each European country to give greater flexibility to EU Member States, while ensuring evaluation, analysis and sustainability of the effectiveness and efficiency of public spending.

Renew Europe also strongly advocates to use this flexibility responsibly and smartly, based on the experience of the Next Generation EU recovery funds, to make progress on investment and structural reforms in such strategic areas as energy, defence, technology, education and the labour market, as well as to accelerate the green and digital transitions, as outlined by the EC in its previous communication. It will provide the EU with a better chance of growth and resilience in the wake of future economic shocks, while advancing the Union's open strategic autonomy. To this end, beyond the oversight role played by the Commission and independent national authorities, we call for improved economic governance with greater democratic scrutiny, in which the European Parliament plays a more important role.

MEP Stéphanie YON-COURTIN (L’Europe Ensemble, France), Renew Europe Coordinator on Economic and Monetary Affairs (ECON, stated:

“The review of our fiscal rules is of upmost importance to make them clear, simple, tailored for each Member State in order to allow growth-enhancing investments to pursue the twin transition and EU strategic autonomy. The spirit of the initial EU communication must be preserved as past crisis demonstrated that "one size fits all" austerity policies are not the adequate answer."

MEP Morten LØKKEGAARD (Venstre, Danmarks Liberale Parti, Denmark), Renew Europe Vice-President and Coordinator of the working group on Economy and Digital Transformation of the Renew Europe Group in the European Parliament, said:

"We are facing a huge challenge: Too many Member States are struggling with crippling debt, which leaves us all extra vulnerable in case of new crisis. We have an urgent need to reform the Stability and Growth Pact to ensure that countries actually bring down their state debt and deficits, while also granting them more flexibility. Without stifling growth or strategically important investments, we need ambitious debt reduction plans, which respects the fundamental principles of the Pact. Furthermore, we also need more transparency in the process to allow for proper scrutiny of enforcement of the plans.”