New economic governance rules fit for the future
On 26 April 2023, the Commission presented legislative proposals to implement the most comprehensive reform of the EU’s economic governance rules since the aftermath of the economic and financial crisis.
The central objective of these proposals is to strengthen public debt sustainability while promoting sustainable and inclusive growth in all Member States through reforms and investment.
The proposals address shortcomings in the current framework. They take into account the need to reduce much-increased public debt levels, build on the lessons learned from the EU policy response to the COVID-19 crisis and prepare the EU for future challenges by supporting progress towards a green, digital, inclusive and resilient economy and making the EU more competitive.
The proposals are the result of an extended period of reflection and broad consultation process.
Stronger national ownership
National medium-term fiscal-structural plans are the cornerstone of the Commission's proposals. Member States will design and present plans setting out their fiscal targets, measures to address macroeconomic imbalances and priority reforms and investments over a period of at least four years. These plans will then be assessed by the Commission and endorsed by the Council based on common EU criteria.
Simpler rules taking account of different fiscal challenges
Fiscal situations, challenges and economic prospects vary greatly across the EU’s 27 Member States. Hence, a one-size-fits-all approach does not work. The proposals seek to move to a more risk-based surveillance framework that puts public debt sustainability at its core, while promoting sustainable and inclusive growth. This approach will adhere to a transparent common EU framework.
Facilitating reforms and investment for EU priorities
The proposals therefore aim to facilitate and encourage Member States implementing important reform and investment measures. Member States will benefit from a more gradual fiscal adjustment path if they commit in their plans to a set of reforms and investment that comply with specific and transparent criteria.
Providing for effective enforcement
Rules require enforcement. While the proposals provide Member States with more control over the design of their medium-term plans, they also put in place a more stringent enforcement regime to ensure Member States deliver on the commitments they undertake in their medium-term fiscal-structural plans.
- Proposal for a regulation