The European Parliament on Tuesday gave the final green light to new European Union (EU) budget rules on deficits and public debt, which must then be approved by member states to come into force on April 30.
At the last plenary meeting of the current legislature in Strasbourg (France), the parliament approved the revision of the EU economic governance rules, which had already been previously agreed upon by the Council (member states) in February last year, approving in clear three parts of legislation.
With the approval of MEPs on Tuesday, during the final plenary session of the current legislature (2019-2024), ahead of the European elections scheduled for June, it remains for the Council (member states) to confirm the adoption of the new legislative package. on economic management, which must happen next Monday for the new rules to come into force exactly one week later, on April 30.
EU fiscal rules were suspended in the wake of the Covid-19 pandemic to allow member states to cope with the crisis, and then consensus was reached on the need to review and update economic governance legislation before adopting the Stability and Growth Pact originally created in the late 1990s years and was already considered “outdated”, was renewed.
The European Commission presented a proposal consisting of three pieces of legislation last April, and today MEPs gave their final approval, providing the preventive “arm” of the Pact, giving an opinion on the “corrective” one and approving the same directive.
The three texts were approved by a clear majority, as they received the support of the main parliament: 359 to 368 votes in favor, 161 to 166 votes against and 61 to 69 abstentions.
A European source explained to Lusa that after today’s parliamentary approval, the permanent representatives of member states to the EU will have to adopt the three bills next Friday.
The package will be confirmed by Council member states at a meeting next Monday, April 29, will be published on the same day in the Official Journal of the EU and will come into force a day later, in April. April 30, the same source added.
As fellow EU lawmakers – the Parliament and the Council – finalized approval of these new community rules on government deficits and debt, member states (including Portugal) only needed to send a simplified version of the Stability Program to Brussels.
If, as expected, new European fiscal rules come into force in the meantime, countries will have more time, until September, to submit a national plan to the European Commission.
These will be new national fiscal and structural plans (they will no longer be called national reform and stability programs) and will include measures to correct macroeconomic imbalances and guidance on priority reforms and investments for four to seven years.
Today’s approval from MEPs was already expected after the European Parliament and EU member states reached a preliminary agreement on February 10 to reform the bloc’s fiscal rules, aimed at ensuring public finances are restored while preserving investment.
This is the planned resumption of these fiscal rules after their suspension due to the Covid-19 pandemic and the war in Ukraine, with new wording despite the usual limits of 60% of gross domestic product (GDP) for public debt and 3% of GDP for deficits .
Debt reduction is expected to be at least one percentage point per year for countries with debt levels above 90% of GDP (as in Portugal) and half a percentage point for countries between that ceiling and the 60% level. GDP.
Member States will have to prepare their national plans, which will be assessed by the European Commission, identifying a period of at least four years to put the debt on a downward trajectory, which could be seven years in the face of reforms and investments (for example included in recovery and resilience plans ).
Despite this, an annual government spending cap will be introduced to maximize distraction.
Countries that do not comply may face excessive deficit procedures and penalties.
Author: Lusa
Source: CM Jornal
I am Michael Melvin, an experienced news writer with a passion for uncovering stories and bringing them to the public. I have been working in the news industry for over five years now, and my work has been published on multiple websites. As an author at 24 News Reporters, I cover world section of current events stories that are both informative and captivating to read.