New Debt Rules Could Clash w/Climate Goals-EU Observer

EU Observer reporting that according to liberal think tank the New Economics Foundation (NEF), new EU debt rules "...are "irresponsible" and will "jeopardise the public investment needed to combat climate change." The European Commission has put forward its plans for reforming its debt rules following the COVID-19 pandemic, with the proposal including, "...a one-size-fits-all rule that would mean countries would have to reduce their deficits by a minimum of 0.5 percentage points of GDP per year when deficits exceed three percent."

• EU Observer: "Countries are scrambling to find a middle ground but have so far failed to reach an agreement, with highly indebted countries like Italy and France insisting on more leeway in deficit rules to allow for more investments, and Germany insisting on uniform and binding limits."
• "Like the existing rules, the proposed commission compromise also adheres to the 1991 Maastricht criteria. These limit debt to a maximum of 60 percent of economic output and deficits below three percent.The commission wants to allow countries more flexibility in reducing debt ratios but still envisions a hard deficit limit of three percent."
• In early August, MNI's Policy team reported on the likely difficulties the EU faces in getting requisite agreement from member states on any new proposals to have a deal in place by year-end.