Medina says ‘more steps are needed’ to reach EU agreement on fiscal rules

Finance Minister Fernando Medina said this Thursday that “more steps are needed” to reach an agreement in the European Union (EU) on new fiscal rules with deficit and public debt ceilings, admitting that there is no consensus yet.

“New rules of economic governance will be on the table and I believe that steps have been taken towards a compromise solution between the various member states. The latest versions received also take steps in this direction, and we believe these developments have been positive.” but further steps are still needed before the final proposal can be approved and therefore I do not believe that [a reforma] will be approved at this Ecofin meeting,” said Fernando Medina.

Speaking to the Portuguese press in Brussels ahead of the informal dinner of EU finance ministers and the official Ecofin meeting on Friday, Portugal’s official responsible for oversight stressed: “I don’t believe expectations are moving in this direction. [porque] We still need a lot of work to develop it.”

“There are a number of important issues that still need to be discussed and resolved. We’ll see if an agreement is reached or not. [mas] I don’t think expectations should be any higher today as we speak […]. I think it is important, first of all, to take steps to make this agreement possible,” insisted Fernando Medina. While more skeptical positions came from countries such as Germany and France, the minister assured: “We will go as far as possible in this regard.”

EU finance ministers will meet this Thursday at an informal dinner to try to reach an agreement on new fiscal rules, with deficit and public debt ceilings, and final discussions based on quantitative debt targets.

The day before EU finance ministers meet at the regular Ecofin meeting in December, the Spanish Council Presidency has planned an informal dinner for that evening, following a meeting of European single currency officials at the Eurogroup in the afternoon, with no indication of time to reach consensus among the rulers of the 27 member states on economic governance reform.

European sources told Lusa that Spain was confident of reaching an agreement this evening following several consultations with EU member states in recent months and a rapprochement between the countries.

However, the same sources acknowledged difficult negotiations, which focus mainly on quantitative criteria with minimum requirements for debt reduction, as well as levels that would lead to the opening of excessive deficit procedures.

The debate comes as those fiscal rules are expected to resume next year, after being suspended due to the pandemic and war in Ukraine, with new wording despite the usual cap of 60% of gross domestic product (GDP) for government debt. and 3% of GDP for the deficit.

Portugal advocates introducing a counter-cyclical nature of this reform, so that in times of higher economic growth, countries make greater efforts to reduce public debt and, instead, have a slower pace of reduction in times of more subdued GDP.