Spain wants EU member states to set their own budgetary targets

Spanish Economy Minister Nadia Calvino on Monday suggested that each member state of the European Union set its own fiscal targets in the future instead of being subject to the targets imposed by the bloc’s fiscal rules.

“In the future, member states must have the first say in setting their own fiscal targets,” Calvino told a rally in Madrid with her Irish counterpart and Eurogroup leader Pascal Donahue. Reuters.

It is recalled that EU countries have started a debate on changing the fiscal rules set out in the Stability and Growth Pact, which sets limits on government borrowing in order to protect the value of the common European currency shared by 19 Member States.

Fiscal rules have been suspended since 2020 to give EU governments room to better deal with the effects of the coronavirus pandemic.

But as growth has returned, fiscal rules are expected to re-enter into force early next year. However, a debate has begun within the eurozone focusing on the need to recognize the new economic reality brought about by the pandemic in the EU, with high public debt, large deficits and the need for huge public investment to tackle climate change.

This is, however, a divisive issue for the Member States, as EU countries with greater fiscal discipline are wary of their other partners, especially the countries of the European South.

Calvino acknowledged that government debt should be reduced, but not at the same rate for all, adding that she wanted the rules to be more understandable and more acceptable to citizens.

“We must ensure that we deal with the extra debt we have issued to deal with the effects of the pandemic, in a way that goes hand in hand with growth and job creation,” she said.