Economic Governance Review: we secure a balanced and responsible framework to make EU fit for the current challenges

Renew Europe Group welcomes today’s endorsement by the Committee on Economic and Monetary Affairs of the report on the Economic Governance Review (EGR). European fiscal rules were suspended in 2020 to give Member States greater budgetary flexibility to cope with the economic and social consequences of events such as the pandemic, the war in Ukraine or the ongoing conflict in the Middle East. Ahead of the reactivation of the Stability and Growth Pact in 2024, the new framework, voted today at an extraordinary meeting in Strasbourg, puts in place an adequate balance between the need to ensure effective debt reduction and enough flexibility for promoting the strategic investments the EU needs to become a truly competitive geopolitical player in an increasingly volatile world.

MEP Billy Kelleher (Fianna Fáil, Ireland), Renew Europe shadow rapporteur on EGR, stated:

"The Covid pandemic and the energy crisis resulting from the Russia’s illegal invasion of Ukraine have caused asymmetrical difficulties in our Member States' economies. A one-size-fits-all approach to economic governance no longer makes sense. Today’s vote will provide Member States sufficient flexibility to address the different challenges the EU as a whole faces – such as climate change – as well as national challenges - such as ageing demographics and shortages of housing – whilst always ensuring that Member States are put on a path to sustainable debt."

The new framework will address the existing investment gaps in the EU, while providing enough fiscal space for strategic public spending that will strengthen the EU Single Market and help to deliver the twin transitions. For example, Member States fiscal plans would have to address how they contribute to National Energy and Climate Plans, the European Climate Law, and the National Digital Decade Roadmaps.

Moreover, thanks to the fruitful negotiation of Renew Europe, there will be safeguards to ensure there is effective debt reduction without dampening growth. National ownership will also be combined with accountability towards independent fiscal institutions and the European Fiscal Board will be provided with an adequate framework for conducting its activities.

Lastly, beyond the oversight role played by the Commission and independent national authorities, the Renew Europe negotiating team has succeeded in securing an improved economic governance with greater democratic scrutiny, in which the European Parliament plays a more important role.