The 27 will intensify work on fiscal rules and Calviño expects a first agreement in October


The 27 will intensify work on fiscal rules and Calviño expects a first agreement in October


The first vice president and acting minister of Economic Affairs and Digital Transformation, Nadia Calviño, has highlighted the "strong commitment" of all European partners to seek a consensus on the reform of fiscal rules and hopes to present a first agreement proposal in the next meeting of EU Economy and Finance Ministers, which will take place in Luxembourg on October 17.

"There has been unanimity regarding the need to intensify our work in the coming weeks, with an ambitious schedule and working constructively to achieve a consensus between now and the end of the year and have new fiscal rules applicable from 2024," Calviño highlighted at a press conference after the informal ministerial meeting of Economic and Financial Affairs of the European Union held in Santiago de Compostela.

According to the economic person responsible for the acting Government, this Saturday's meeting has been "very fruitful" and allows progress to begin in the coming weeks at the different levels in order to be able to put a possible agreement on the table in the Ecofin of October.

Looking ahead to that meeting, Calviño has assured that there is "unanimity" on the part of the 27 regarding the need to intensify work in the coming weeks to achieve a consensus. "They have all shown themselves open to moving on to the political negotiation phase," said the vice president.

For Calviño, the rules must be agreed on the appropriate balance between a sustained reduction in public debt to GDP ratios - and therefore sustainable public finances in the medium and long term - and the necessary investment and incentives to address structural reforms.

For his part, the European Commissioner for Trade, Valdis Dombrovskis, highlighted in the press conference the "ambition" of the Spanish presidency to have an agreement on fiscal rules before the end of the year. "It may be a great challenge, but the Spanish presidency is very committed," said the commissioner, after ensuring that the Commission will continue to support these efforts.

Having closed 70% of the reform text at a technical level, Calviño has insisted on moving on to political negotiation around the return of fiscal rules that, after four years frozen by the pandemic and the impact of the war in Ukraine, They will once again demand a reduction in the public deficit below 3% of GDP and a public debt below 60%.

The Commission's proposal in this regard gives greater power to governments to decide how to meet these objectives, although it requires a minimum annual deficit adjustment of 0.5% of GDP up to 3%. At the same time, a gradual reduction of the debt is proposed over four years, extendable up to seven, a proposal that has majority support from the 27.

But countries like Germany had rejected the proposal linked to the budget adjustment paths for each country and defended a minimum debt reduction of 1% of annual GDP for countries with a higher debt, such as Spain, and 0 .5% for those less indebted, parameters that the country considers plausible despite the fact that some countries criticize them for being too frugal.

However, from Spain they have been optimistic regarding the numerical objectives of the proposal after the last meetings and have highlighted the bilateral work with Germany, with the help of the Netherlands and Denmark, to build bridges and get out of the disruptive blocs in the where the discussion was.

Although this Saturday's talks addressed the reform informally, diplomatic sources have indicated that the Spanish presidency will use them with a view to presenting a first proposal for an agreement at the next meeting of the ministers in the field, which will take place in Luxembourg. on October 17.

In the short term, Spain hopes to present a proposal regarding the reform at the Ecofin that will take place in Luxembourg in mid-October. To achieve that, there will be an informal meeting - at a high level but without ministers - in Madrid at the beginning of October, with a view to preparing the discussion and arranging the landing of the proposal.

If there were any additional elements left, they would be addressed in November, a month in which the European Parliament also hopes to have its position and then jointly agree on a final text. In addition, some ministers have offered to have additional meetings and contacts beyond the Ecofin meeting in October, which will have to be held because the times are very tight.