MNI: EU Vote Pushes Back Fiscal Rule Implementation-Officials

European Union officials have agreed to set a deadline for member states to submit four- or seven-year fiscal structural plans of Sept 20 as the process of approving the bloc’s new fiscal rules is made slower by upcoming European parliament elections, officials told MNI.

The structural plans can only be presented once the European Commission provides states with their long-term debt trajectories in its annual Country Specific Recommendations, but the Commission has made clear that it will wait before doing so until after the June 6-9 elections in order to avoid becoming embroiled in national politics. The Commission is also likely to wait until after the elections before opening Excessive Deficit Procedures, though it is still not clear how these will be coordinated with the Country Specific Recommendations, officials said. (See MNI: EU Excessive Debt Procedures Under New Rules-Officials)

The new fiscal rules, which allow the Commission greater discretion in deciding on adjustment programmes for countries exceeding borrowing limits, will only come into force following a European Parliament vote in its 22-25 April plenary session.

ECOFIN

Details of how they will coordinate existing mechanisms such as the Excessive Deficit Procedures and the Recommendations in this transition year in particular have yet to be defined, and are currently under discussion, one official said.

In preparatory talks ahead of next week’s Ecofin meeting of finance ministers, the Commission has also conceded that it will take a pragmatic stance when it comes to vetting the national plans, officials said.

“The Commission wants to be pragmatic when it comes to requirements of the programmes, meaning that anything it will not demand of states anything which is unrealistic,” one said.