Fiscal rules need teeth or they're trash

“The EU’s system of economic governance is opaque, ineffective in bringing down debt and sometimes has even made a crisis worse. The European Commission needs to draw the right lessons from the failures of the past”, explained Markus Ferber MEP, the EPP Group Spokesman in the European Parliament’s Economic and Monetary Affairs Committee, as the Commission is expected to adopt its long-awaited reform proposal for the reform of the Stability and Growth Pact today.

This Pact establishes a set of criteria that Member States must meet in order to consolidate their public finances and coordinate their budgetary policies by controlling excessive deficits and reducing high public debt.

For the EPP Group, a credible economic governance framework is based on sound rules and their compliance and enforcement.

“When it comes to our fiscal rules, there is beauty in simplicity. We need simple, effective and credible rules that focus on the right metrics. In the past, the European Commission has undermined the credibility of the Stability and Growth Pact by not enforcing the rules and giving larger Member States a sweetheart deal. Fiscal rules need teeth or they're trash!", Ferber said.

“We need to get the review of fiscal rules right. Macroeconomic stability is the foundation of the Single Currency and of Europe’s economic success. High debt levels and rising interest rates are an explosive combination that could easily result in a new debt crisis. We have seen in the past how divisive and dangerous a sovereign debt crisis can become. Our fiscal rules must make sure that there will never be another European debt crisis”, Ferber emphasised.