[#FiscalMatters] Reforming EU fiscal rules: the debate starts

Since its creation, Greentervention has been advocating for a reform of the European fiscal rules. This reform is essential to achieve the objectives of the Green Pact and to finance the public expenditure needed to decarbonise our economies, protect biodiversity and fight against inequalities: whether it is investment in infrastructure, zero carbon urban public transports, cycle lanes, charging points for electro cars, railways, aid to households to insulate their homes, to equip themselves with zero-carbon heating or simply to compensate for the necessary increases in the price of carbon energies for the most vulnerable during the transition, aid to businesses to accelerate their transition, and aid to workers to enable them to make their professional reconversion. It would be irresponsible not to invest in the transition under the pretext of rules following principles established a quarter of a century ago.  

This reform is on the agenda. Reapplying the existing rules, only suspended because of COVID, would jeopardise not only the recovery of employment but also the transition. But only a mobilisation of all citizens, NGOs and trade unions in each country and at European level will make it possible to move the lines.

The finance ministers of eight countries have formed a « No to reform » coalition; Bruno Lemaire, the finance minister of France, who will bear a heavy responsibility since he will hold the EU presidency during the first semester 2022, has indicated that he will not fight for a rapid reform; the German elections on 26 September opened the door to government to the liberal party, which is fiercely opposed to any reform.

But there is good news: the supporters of deep reform are also organising massively.

Firstly, a coalition, #fiscalmatters, in which Greentervention is involved, bringing together the European Trade Union Confederation and numerous NGOs organised at European or national level, has set itself the objective of informing and mobilising. From today and throughout the week you can debate with those who will be involved in the decision and those who will inform it. Join many events in English, but also in Dutch and French. We have no doubt that this is only a first step, which will be followed up in Brussels and in all European countries. To win, we need indeed a convergence of actions at European and national levels.

Secondly, French civil society has understood that it must mobilise so that the French Presidency is not a lost opportunity. A call for reform whose first signatories include the Secretary General of the CFDT, numerous NGOs organised in the ecological and climate fight, economists from diverse horizons and national and European parliamentarians, calls for the Stability and Growth Pact to be replaced by a Pact of Resilience and Solidarity. No doubt this is only a first initiative and will be followed by others. The new Resilience and Solidarity Pact called for would be built around the following common sense principles, which, it should be underlined, are not respected by the current fiscal rules:

1. Take full account of ecological and social risks in the EU’s budgetary steering. The sustainability of public debt is assessed by balancing the risks of under-investment in the just transition.

2. Secure and encourage the financing of just transition. Public expenditure necessary for the EU just transition is excluded from the deficit calculation and encouraged. This is not limited to green investments. It includes support for green investments by households and companies, as well as vocational training and support for workers in transition sectors.

3. Revise the tools of economic coordination. The coordination of economies is no longer dominated by the numerical rules of budget management. It integrates the economic realities of each country and of the Eurozone, in particular public assets, interest rates, private debt; it pays equal attention to the costs and risks generated by imbalances in employment, social, ecological, monetary and financial terms.

4. Democratise fiscal and economic governance: The new governance is based on readable and coherent economic, ecological and social objectives. It promotes democratic debate and the political legitimacy of common rules.

You can sign this call for reform here:

https://blogs.alternatives-economiques.fr/alterco/2021/09/24/appel-un-pacte-de-resilience-et-de-solidarite-pour-remplacer-le-pacte-de-stabilite-et-de-croissance

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