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NO to austerity, YES to investments - S&Ds set to fight for progressive new EU fiscal rules

Date

17 Jan 2024

Sections

Euro & Finance

The Socialists and Democrats are determined to fight for progressive new EU fiscal rules. Today, the European Parliament is expected to give its green light to start negotiations with EU member states and the Commission on the long-awaited and much-needed reform of these rules. The Parliament’s position has a strong social democratic imprint. 

The negotiations will be tough, but the S&Ds will insist on four key principles: more flexibility for countries when managing their public finances, more investments, more focus on social rights, as well as more ownership and democratic national accountability*. 

Margarida Marques, S&D MEP and European Parliament’s co-rapporteur on the reform of EU fiscal rules, said:

“We are proud of our achievements in the parliamentary negotiations. The final compromise agreed by the European Parliament has a strong progressive signature ensuring fairer EU fiscal rules that will shield European people and companies against austerity by bolstering investments and social rights. This is what Europeans aspire to.

“It cannot be overstated that the Parliament’s agreement is far better than the European Commission’s proposal and the agreement reached by EU member states. It is also much better than going back to the old rules or having no rules at all. Any other claims are simply naive, unrealistic and dangerous.”

Jonás Fernández, MEP and S&D spokesperson on economic and monetary affairs, added:

“We can indeed be proud of the Parliament’s agreement on new EU fiscal rules. It opens a new chapter and turns the page on austerity. It strengthens the social dimension of the economic governance framework and gives member states room for manoeuvre to invest in green, digital and social priorities.

“The EU needs to overhaul its outdated and inefficient fiscal rules without further delay. Therefore, after the expected finalisation of the process in Parliament today in Strasbourg, we expect that negotiations with EU member states, which will be tough, lead to the final agreement by the end of this legislative term.”

*Note to editors:

A summary of the main progressive achievements during the challenging talks with other political groups in the European Parliament, which the S&Ds will now defend in negotiations with EU member states:

-  To stave off austerity, the S&Ds secured a counter-cyclical approach that will help alleviate potential negative effects of the economic cycle. For example, when the economy slows down, governments would have more flexibility to address negative consequences, as well as to secure the financing of social and environmental policies.

-  Investments will be bolstered by introducing the investment clause that will allow countries to deviate from their expenditure paths in case of significant investments in four priorities – climate and digital transition, defence and the social pillar.

-  The new rules will have a strong social imprint through the introduction of the social convergence framework. In practice, this means that member states will have to monitor and identify social risks and prevent policy actions to have negative spillover effects on social targets. This strengthens the social dimension and counterweights the mainly economic targets.

-  The S&Ds have also ensured an ambitious look forward – this reform paves the way for introducing a permanent fiscal capacity that would serve as a truly ambitious generator of public investment in the future.

 

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