Avoid a new debt crisis in the wake of the Corona pandemic

“We have to be very careful that the current frenzy of Corona spending does not lead us directly into the next debt crisis. Therefore, the European Commission urgently needs to establish when and under what conditions the application of the fiscal rules in the European Union will be normalised”, said Markus Ferber MEP, EPP Group Spokesman in the European Parliament's Economic and Monetary Affairs Committee. His comment follows today’s adoption by the European Commission of the European Semester Autumn Package.

The Autumn Package kicks off the yearly cycle of economic governance coordination for 2021 at a time when the so-called General Escape Clause has been activated for 2020 and 2021. The clause allows Member States to temporarily diverge from the budget deficit rules agreed upon in the Stability and Growth Pact.

“In light of the difficult situation we are in, an effective coordination of economic and fiscal policy is more important than ever. However, we get the impression that Commissioner Gentiloni would like to keep the General Escape Clause activated for the long haul. This is, of course, a no go”, Ferber stressed.

“The suspension of the fiscal rules must not become a permanent feature of EU fiscal policy-making. At this stage, predictability about the fiscal policy path is crucial. Deviations can be necessary in times of crisis, but should not become the new norm when our economies have recovered”, Ferber concluded.