The text, adopted with 461 votes to 94 and 133 abstentions, underlines that the EU’s economic governance framework needs to be reviewed before the General Escape Clause is deactivated. The clause allowed member states to deal adequately with the crisis, while departing from the budgetary requirements that would normally apply under the European fiscal framework.
The review must not undermine the economic recovery by prematurely suggesting that support be withdrawn, MEPs stress, but it should strengthen a sustainable, inclusive, green and digital recovery by contributing to the European Green Deal and to the implementation of the European Pillar of Social Rights. It should also consider differing situations across member states and counteract macroeconomic imbalances.
Monetary and fiscal policies
MEPs underlined the importance of interaction between monetary and fiscal policies and called for favourable financing conditions and support for firms, workers and people to be preserved. At the same time, they highlighted the importance of sustainable fiscal policies, as well as debt and deficit trajectories that ensure credible paths to reducing debt, including a country-specific pace of sovereign debt reduction.
MEPs also recalled that the European Semester is a well-established framework to coordinate the budgetary, economic, social and employment policies across the European Union, supporting the EU’s long-standing goals of sustainable growth, and sustainable public finances. They point, however, to the lack of national ownership as one its main weaknesses and call for the Parliament to be more involved in the European Semester process.
Finally, MEPs believe that the Conference on the Future of Europe provides an opportunity to involve citizens more actively in the EU policy-making process and pave the way for effective mechanisms for citizens’ participation.
The lead MEP Margarida Marques (S&D, PT), said: “With the general escape clause activated, we have a window of opportunity to review the economic governance framework. The current fiscal rules are complex, obsolete and very difficult to interpret. Applying them would not only undermine the economic and social recovery but also hamper necessary investments in the digital and green transition that Europe needs.
Circumstances have changed since the Maastricht Treaty, hence the economic governance framework must be reviewed and it should be future oriented. The new fiscal rules must be simpler and more flexible in order to ensure debt sustainability, and promote long-term economic growth with appropriate public and private investment. We propose country-specific debt-reduction paths taking into account the different challenges faced by each country.
This report is the European Parliament’s contribution to the public debate that the European Commission is expected to launch in autumn. We call on the Commission to take into account the Parliament’s position and come forward with comprehensive and forward-looking legislative proposals for the crucial reform of the EU’s economic governance”