France and Italy have called for a more favorable treatment of investments that boost long-term growth, signaling the start of a battle over a revision of the European Union’s fiscal rules.
“We need to have more room for maneuver and a lot of basic spending for the future and ensure our viability,” French President Macron and Italian Prime Minister Draghi said in a joint article in the Financial Times.
The two countries have recently consolidated their alliance with the symbolic signing of a co-operation treaty, and both have called for a review of EU fiscal rules, which have been suspended until the end of 2022 due to the pandemic.
However, any changes will need the support of the new German Chancellor, Olaf Schultz, who met with Draghi in Rome earlier this week.
The German leader has argued that the current framework already offers great flexibility.
In a nod to Germany and the Nordic countries, Macron and Draghi acknowledged that “we need to reduce our debt levels.”
Germany is leading a group of EU member states that have expressed concerns about out-of-control spending if the rules are relaxed.
But the two leaders also argued that the current fiscal framework is “dark and overly complicated”.
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Source From: Capital
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