After four years in which budget disciplinary rules have been suspended (since March 2020 at the start of the pandemic), the European Commission is preparing to publish a proposal for its reform in the coming days, and the Independent Financial Responsibility Authority (Airef) technical proposal is within the community deadline for public hearing this Friday. sent to Brussels. Y What the Financial Authority recommends is, public deficit 3%conditioning the budget policy in recent years, stop being a reference to determine whether a country complies with the rules of stability or, conversely, needs a visit from the ‘men in black’ of the European Commission to force the governments of the time to align their public accounts.
In Airef’s proposal, he suggests instead of the obvious: new budget stability reference Public debt and spending limit budget for each year. In particular, Airef recommends that each country set, through Parliament, a reference for sustainable public debt over the medium term and a four-year spending path aligned with this path at the start of each legislature.
According to Airef sources, his proposal was contradicted in initial preliminary discussions with experts from the Ministry of Economy, the European Commission, education services and budget accounting. The same sources interpret this Airef’s proposal is “compatible” with the reform The financial stability rules that the European Commission is working on are at least on moving the main reference criterion from deficit to debt and setting differentiated targets for each country.
These are general criteria shared by the Spanish Government and other countries such as the Netherlands. In fact, the governments of Spain and the Netherlands joined forces to defend them and made it official through a joint document that both sides signed last April. other countries like Germanythey are on another wave and they comment that country-by-country agreements are not the way to ensure financial stability in the eurozone.
Elements of the offer
Specifically, the Airef whitepaper proposes that each incoming government propose a specific “debt anchor” for its country at the start of its mandate and commit to a derived spending path for the entire legislature. This pathway, which must be approved by parliament and community officials, will be the binding reference for the next four years. Again, can be changed in exceptional circumstances by activating an escape clause.
In the event of a serious breach of the road in this model, the European Commission will take action to return spending to agreed targets. Instead of maintaining the existing enforcement mechanism – as a coercive way to enforce compliance – Airef, reputational risk more effective ie known European Commission’s ‘men in black’ have to intervene In a country’s economic policy, as it can be today.
In the proposed scheme, Airef itself will play an important role as an organization capable of delivering. technical tools To the Government to set debt and spending targets that must be submitted for consideration by Parliament. In this scheme, Airef’s analytical capacity will also be useful in providing criteria for assessing compliance with committed spending paths and ways to improve the efficiency and quality of public spending in case of deviation. about the different ‘expenditure review’ reports.