Communication on orientations for a reform of the EU economic governance framework

Key points

The EESC:

• welcomes the Commission Communication outlining orientations for a reform of the economic governance framework and agrees with the Commission on the need for a swift agreement ahead of the Member States' budgetary processes for 2024;

• acknowledges the Commission's plan to maintain reference values, but stresses that fiscal structural plans have to ensure that debt-to-GDP ratios are put on a downward path or stay at prudent levels;

• supports the Commission's proposal to no longer apply the rigid 1/20th rule since it could overburden high-debt Member States, with a negative impact on growth and debt sustainability itself. The mid-term four-year evaluation period to reference fiscal adjustments, extendable for three additional years where necessary, also seems to be proportionate;

• welcomes the Commission's focus on net primary expenditure as the main evaluation parameter of the new economic governance;

• points out that for a reformed framework to be successful, ownership of the process is key. It is therefore important to develop further measures that could be taken to enhance ownership of the rules, thereby ensuring that all governments are committed to a revised framework;

• considers it paramount that the forthcoming legislative proposals establish minimum standards of national parliamentary oversight and organised civil society involvement with regard to the drafting of national medium-term fiscal structural plans;

• underlines the need for proper rules ensuring strong enforcement. In the exceptional cases where sanctions are considered, they must be effective and implemented in a transparent manner. The rules must be applied equally to all Member States in order to maintain credibility;

• welcomes the fact that increased quality and quantity of public investments is outlined as a factor for consideration in the process of achieving debt sustainability. The EESC also welcomes the extension of the adjustment path which may be granted for a maximum of three years;

• underlines that further initiatives might be needed to make sure that sufficient private and public capital is mobilised for the green transition and social cohesion;

• considers that the Member States' annual progress reports and details about the implementation status of reforms and investments as well as the Commission and Council evaluations carried out in the context of annual surveillance should be made publicly available.