9
May
2023
Watch
Revision of the Stability and Growth Pact (debate)
Mr President, ladies and gentlemen, Having a single currency inevitably means that all members of this monetary union must take responsibility for the stability of the single currency. This includes, first and foremost, a responsible fiscal policy. This is the idea behind the Stability and Growth Pact: One bears responsibility not only for one's own budget, but for the common currency. If we take a critical look at the existing rules, however, we must note that the set of rules did not work well. Many Member States did not respect the deficit limits even in good times. The national debt has continued to rise, even before the pandemic, before the terrible Russian war of aggression. I fully agree with the analysis that we need a reform of the regulatory framework. But what the reform must be like – I think there are still big differences. We have three problems with the Stability and Growth Pact. Firstly: Fiscal consolidation has always been put on the back burner. Secondly: The Commission has allowed far too much flexibility. And thirdly: The Commission has not enforced the rules boldly enough, because it has never been aware of the sanction possibilities – I say it again: Never before! – made use of. The Commission's three solutions are now: more time, more flexibility and even weaker sanctions. With all due respect, this is not the right solution. To be clear: The Stability and Growth Pact never had a flexibility problem, but an application problem and a credibility problem. What the Commission has now presented will not help to properly address these problems. We still have a lot of work to do in the legislative process. This is my last criticism that you give us so little time. After all, it was clear that the Stability and Growth Pact would come back into force on 1 January next year. That you give us so little time to give this intensive advice is not fair.