21st Sep 2023

Spain calls for new EU spending rules on fiscal 'pilgrimage'

  • Spain's economy minister Nadia Calviño pledged to present a new draft version of EU spending rules at a meeting in Luxembourg next month (Photo: Flickr)
Listen to article

At a two-day gathering of finance ministers in Santiago de Compostela, the capital of Galicia in northwestern Spain, that ended on Saturday (16 September), Spanish economy minister Nadia Calviño called on her colleagues to agree on new spending rules before the end of the year.

Comparing the negotiations to a "Camino" [a pilgrimage], a reference to the coastal city's history as one of Europe's premier holy places and pilgrimage sites, Calviño pledged to present a new draft of the so-called Stability and Growth Pact at a meeting of ministers in Luxembourg next month, with the intention to push it through to trilogue negotiations with the EU Parliament in November.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

"It may be challenging," European Commission Vice-President Valdis Dombrovskis said at a news conference on Saturday. "But the Spanish Presidency is committed to this timeframe."

The EU Commission presented a draft text in April, but negotiations have since become bogged down, with France and Germany at opposite ends of the debate.

While Germany, backed by Sweden and Finland, wants uniform spending rules for all, France and Italy claim more fiscal flexibility will be needed for years to come to help deal with higher investment needs in clean energy and to ensure funds for Ukraine.

For his part, German finance minister Christian Lindner said that "expansionary" fiscal policy should end and states should instead refocus on "increasing growth", which, he believes, will be best accomplished by lowering taxes, reducing planning times, and removing bureaucracy.

Fiscal rules have been suspended until the end of this year to help countries deal with the effects of the coronavirus pandemic and the consequences of the Russian invasion of Ukraine, but will come back into force in 2024 whether member states can agree on new rules or not.

Countries are scrambling to find a middle ground, but have yet to reach an agreement, and there was little sign France and Germany were moving closer to compromise over the weekend.

According to Calviño, 70 percent of the text had been agreed upon.

"Now the time has come for a compromise, which will need to strike the right balance between sustainable debt reduction paths and ensuring the necessary fiscal space for investments," she said.

Spain, which currently holds the EU's rotating presidency, is expected to schedule extra meetings before the end of the year in an effort to hammer out a deal.

The next meeting will occur at a gathering of the Economic and Financial Committee in Madrid in two weeks.

Looser EU fiscal rules agreed, with 'country-specific' flexibility

EU finance ministers agreed on new spending rules, copying much of previously existing rules. One worry is that only three countries — Sweden, Denmark and Luxembourg — could currently afford to meet green commitments while meeting debt and deficit rules.

France, Germany at loggerheads over EU spending rules

EU finance ministers met to discuss the proposed update of the bloc's spending rules but failed to achieve any progress, with France and Germany still at odds over the reforms after the meeting.

EU agrees to cut spending for 2024, despite investment needs

Although final fiscal rules are uncertain and eventual budget cuts will likely be subject to negotiation between the commission and individual member states, Thursday's announcement points to a general tightening of the purse in Europe.


The gaping green-hydrogen gap in EU policy

The challenge of decarbonising shipping and aviation has come out of the shadows and into the spotlight this year — but current EU legislation doesn't get either sector to where it needs to go.

Latest News

  1. Europe must Trump-proof its Ukraine arms supplies
  2. Antifascism and fascism are opposites, whatever elites say
  3. MEPs back Germany's Buch to lead ECB supervisory arm
  4. Russia to blame for Azerbaijan attack, EU says
  5. Fresh dispute may delay EU-wide migration reforms
  6. MEPs call for extra €10bn to boost EU's long-term budget
  7. No changes to Turkey deal on Nato, Sweden says
  8. Socialist MEP defends own side jobs after voting to ban others

Stakeholders' Highlights

  1. International Medical Devices Regulators Forum (IMDRF)Join regulators, industry & healthcare experts at the 24th IMDRF session, September 25-26, Berlin. Register by 20 Sept to join in person or online.
  2. UNOPSUNOPS begins works under EU-funded project to repair schools in Ukraine
  3. Georgia Ministry of Foreign AffairsGeorgia effectively prevents sanctions evasion against Russia – confirm EU, UK, USA
  4. International Medical Devices Regulators Forum (IMDRF)Join regulators & industry experts at the 24th IMDRF session- Berlin September 25-26. Register early for discounted hotel rates
  5. Nordic Council of MinistersGlobal interest in the new Nordic Nutrition Recommendations – here are the speakers for the launch
  6. Nordic Council of Ministers20 June: Launch of the new Nordic Nutrition Recommendations

Join EUobserver

Support quality EU news

Join us