Filenews 9 November 2022
The European Commission presented new guidance for a reformed EU economic governance framework today, taking into account the challenges facing Europe and concerns about the current context.
The aim is to ensure debt sustainability and boost sustainable and inclusive growth in Europe through investments and reforms, the Commission said in a statement.
It notes at the same time that the new guidance seeks to ensure that the framework for economic governance is simpler, more transparent and effective, with greater national ownership and better enforcement, while allowing for reforms and investments as well as the reduction of high public debt ratios in a realistic, gradual and lasting manner.
Based on the new plan, it is proposed to move to a transparent EU surveillance framework based on the risks that differentiate countries taking into account the challenges of their public debt.
How it will work
-In the context of the common European framework, the Commission will present a reference plan for fiscal adjustment, covering a period of four years, based on the methodology for debt sustainability analysis. This fiscal adjustment reference plan should ensure that the debt of the Member State facing major or moderate challenges enters a sustainable downward path and the deficit remains on a credible basis below the set reference value of 3% of GDP set by the Treaty.
-Member States will then submit plans setting out the medium-term budgetary path, reform priorities and public investment commitments. Member States could propose a longer adjustment period, extending the fiscal adjustment path by up to three years, when the trajectory is supported by a series of reform and investment commitments that support debt sustainability and respond to common EU priorities and objectives
-As a third step, the Commission would assess the plans, providing a positive assessment if debt is on a downward path or remains at consistent levels and the government deficit remains reliably below the 3% of GDP reference value over the medium term. The Council will approve the plans following a positive assessment by the Commission
-Finally, the Commission will continuously monitor the implementation of the plans. Member States will submit annual progress reports on the implementation of the plans to facilitate effective monitoring and ensure transparency.
Source:Capital.gr
