The agreements that are missing from the Pact
A new stability pact in Europe can no longer be postponed: here's why. Guiglia's Notebook
The old rules were suspended at the start of the pandemic. But four years have passed since then, and in the meantime wars and terrorism have also bloodied the world. Therefore, a new stability pact in Europe to safeguard the economy from the serious and lasting international effects that were unforeseen yesterday and unforeseeable tomorrow can no longer be postponed.
THE REFORM OF THE STABILITY PACT
At the Ecofin meeting for the 2024 EU budget, the 27 finance ministers were all well aware that reforming the pre-pandemic pact is an obligatory path. At the cost of having already announced, in search of the closest agreement, but which does not yet exist, an extraordinary summit for the end of November. So as to be able to approve the new pact within the year. Otherwise, the old rules for European public finances would return.
But the "Stability Pact" is also called "growth pact" and therefore, in examining the proposal that comes from the Commission, the commitment of the reforming ministers must be aimed at the two aspects of the same macroeconomy: discipline in the accounts, but also a new mechanism to simplify and support investments. Therefore, monitor the budget, but without the blinders of the past. An intent that the electoral campaign at the gates of the EU (June 2024) certainly does not facilitate.
WHAT GERMANY, FRANCE AND ITALY ASK FOR
In the face of a so far lukewarm mediation by the Spanish presidency on the dominant German-French line (Germany asks for guarantees on the reduction of the deficit and debt, France more sensitivity on taxes and investments), Italy is putting its foot down: it's not good set deficit criteria with a further margin below 3% of GDP. It would be penalizing for us. Better, at that point, to even stick with the old rules.
Political negotiations on very technical aspects, but with practical implications for citizens, continue. Agreement, moreover, also means taking into account the requests of one of the three main economies of the EU, namely ours.
But Italian dissent is not muscular, that is, impotent. And offers interlocutors a sensible alternative to what is considered harmful.
Even when he was at Palazzo Chigi, Mario Draghi taught that there is no need to raise one's voice to make Italy's good reasons count. And that we need to build alliances: you can't win alone. The lesson always applies.
Published in L'Arena di Verona, Il Giornale di Vicenza and Bresciaoggi
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This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/mondo/patto-stabilita-riforma-guiglia/ on Sat, 18 Nov 2023 06:20:14 +0000.