MNI BRIEF: EU FinMins To Discuss Call For Green Fiscal Pact

EU finance ministers are set to discuss a proposal from Brussels-based think tank Bruegel for a Green Investment 'Golden Rule' during talks in Slovenia this weekend, a proposal that suggests additional public investment of between 0.5% and 1% of GDP will be needed over the next ten years to meet EU climate goals.

The Bruegel paper calls for a 'green golden rule', which would exclude green investment from the fiscal indicators used to measure Stability Pact compliance, as "the most promising option" to avoid the Green Transition falling victim to budget cuts. If the Stability Pact is relaxed in coming years, the rule would be unnecessary, the paper says.

Stronger regulations and higher emission prices would incentivise private green investment, reduce the burden on national budgets and create key elements for a 'Green Fiscal Pact'. The debate is likely to provide an opportunity for ministers to air their own ideas for reform of the EU's fiscal rules, with the Commission likely to restart the review of the Stability and Growth Pact once the German elections on September 26 are over.