European Union finance chiefs are close to reaching a deal this week to revamp the bloc’s fiscal rules ahead of a self-imposed year-end deadline, according to Laurence Boone, France’s minister for European affairs, according to Bloomberg.
“Progress has been quite impressive,” she told Bloomberg Television in an interview on Tuesday. “There remain some tiny details, but I’m quite confident that we can land somewhere, and hopefully tomorrow afternoon we’ll have new rules.”
EU finance ministers are in the final stages of thrashing out a reform of the bloc’s framework limiting debt and deficits, and are due to hold a virtual meeting on Wednesday. The old rules were suspended to give governments spending leeway to cope with the pandemic and the fallout from Russia’s invasion of Ukraine, but they’re due to kick in again in January.
“There has been much progress,” Boone said. “I think we’ve managed to strike a deal where you have both the sustainability of public finances, room for green, tech and defense investment, as well as public-finance trajectories that are tailor-made for each country.”
She said the new framework would be “designed in such a way that each country can own these rules,” which she said was “essential when you have to adjust public finances over the medium-term.”
Her comments come just days after Italian Finance Minister Giancarlo Giorgetti predicted an agreement this week was highly unlikely even as he acknowledged there had been some steps forward. Italy’s premier, Giorgia Meloni, urged ministers to try to reach a deal.
France’s Boone added that new rules would give some comfort to the European Central Bank that “the policy mix is OK and in line with the growth outlook and the inflation outlook.”
The institution’s president, Christine Lagarde, last week called on the EU to push ahead with the reform of the economic governance framework and make faster progress on structural reforms to boost competitiveness, adding that the ECB feared a level of procrastination.