New debt rules will be great, but only if seriously implemented

Clear rules, clear enforcement and a reasonable balance between reducing excessive debt and allowing for investments: that was the EPP Group's compass when shaping the new fiscal rules for EU Member States.

"This reform is both a fresh start and a return to fiscal responsibility. The old fiscal rules had many weaknesses and loopholes and suffered from almost non-existent enforcement. The new framework constitutes a solid bedrock for the EU’s Economic and Monetary Union. The rules will be simpler and more predictable going forward," explained Markus Ferber, MEP, the EPP Group Spokesman on Economic and Monetary Affairs, ahead of the vote in April's plenary session.

Economic governance will be more country-specific but within an EU framework. “For example, we have managed to put a concrete figure on the required yearly debt reduction of 1 per cent debt to GDP for high-debt Member States. We also added a tangible figure on the maximum deviation that Member States are allowed to make from their net expenditure path. These kinds of solid safeguards help to ensure debt sustainability and a common EU approach while taking into account the different starting positions of Member States,” Ferber explained.

“However, if the new framework will really fare better than the old one depends on the will of the Commission. The institution needs to pursue a strict enforcement policy and needs to make sure that there is no back loading of fiscal consolidation. If the Commission applies the same ‘laissez-faire’ strategy as with the old rules, we are doomed. Sound finances and sustainable debt levels remain crucial, especially given the recent increase in the cost of public borrowing," Ferber concluded.