MNI BRIEF: Time Not Unlimited On Fiscal Rules Debate-Gentiloni

EU Economy Commissioner Paolo Gentiloni warned Friday that time is not unlimited to get to an agreement on reform of the EU’s fiscal rules as Germany continues to push for the imposition of tougher debt reduction rules.

Speaking ahead of a discussion on the topic by EU finance ministers, Gentiloni warned that a delay to the end-2023 deadline for agreement would mean that the new rules would not be in place for the 2025 budget cycle. The Escape Clause from the current rules will expire from the start of next year under current plans, meaning that if there is no new fiscal regime in place, the EU’s surveillance of member state draft budget plans for the following year would take place under the old rules.

French Finance Minister Bruno Le Maire rejected Germany’s call for a more “automatic and uniform” fiscal regime which he said would lead to recession and reduced economic growth. Le Maire said that nonetheless, finance ministers’ views on the way forward are “close”.