reform of tax rules to refresh budget discipline standards within the European Union has moved into its final phase, aiming for a political agreement at the EcFin meeting of Economy and Finance Ministers in December. Acting Economy Minister Nadia Calviño, representing the current Spanish Presidency, presented a consensus proposal to the Ecofin table this week for an “exit zone,” a term she used to describe a path toward consensus. This document builds on the initial framework laid out by the European Commission in April and is intended to shed light on potential solutions to the ongoing dispute surrounding how new EU fiscal rules should be designed.
Calviño arrives at Ecofin with a proposal that could authorize minimum budget adjustments for member states whose debt exceeds 60% of GDP.
“This landing zone offers guarantees for a gradual and steady reduction of public debt while also creating fiscal space to respond to future crises and enabling essential reforms in areas prioritized by the European Union,” Calviño said at a post-Ecofin press briefing, noting there is still substantial work ahead. She added that the core framework elements, the mechanisms to be implemented, and the guardrails must be refined, with legal text to be drafted soon to translate the plan into binding rules.
Calviño seeks a Franco-German settlement to ease agreement across 27 states on new EU fiscal rules
Calviño’s approach clears a path for broader alignment among member states by proposing guardrails and country-specific adjustment tracks designed to reassure even wary economies such as Germany, and to secure a workable landing zone that can be accepted across the Union.
The focus on security measures
Nadia Calviño outlined this Spanish Presidency proposal after intensifying outreach to European capitals over the past two weeks, including more than 50 meetings. The plan echoes the Commission’s framework: each country should chart its own medium-term adjustment path. The innovation lies in the guardrails—personalized adjustment paths that meet minimum requirements—intended to reassure hardliners in Berlin and help Spain anchor Germany in a workable compromise. The landing zone is thus a mechanism to push reform while preserving political support across capitals.
The term “protection” is poised to become a central concept in the negotiations. While the minister did not disclose the exact contents of these protective measures, she emphasized their link to deficits and debt, acknowledging that precise calibration remains to be worked out.
Under the April legislative proposal from the European Commission, Germany had already secured a rule calling for a minimum annual budget adjustment of 0.5% of GDP for countries with deficits above 3% of GDP. The Spanish plan adds a debt-related element to that offer. Sources familiar with the document indicate that the new rule would require a minimum annual adjustment for countries with public debt above 60% of GDP. In the current data set, Greece, Italy, Portugal, France, Spain, and Belgium would be affected, with figures reflecting 2022 data.
Calviño called the proposed landing zone faithful to the Commission’s spirit, while seeking further development and calibration to gain political agreement. An open question remains the degree of deficit protection, and how precisely it should be calibrated—a topic still under discussion, according to Valdis Dombrovskis, the European Commission vice-president, who noted that the status is still under negotiation.
Franco-German negotiations
“Calibration” stands as a second keyword in the ongoing talks. The Franco-German dynamic now shapes the debate as France and Germany hold divergent positions on reforming EU fiscal rules. German Finance Minister Christian Lindner summarized the mood: the discussion is moving beyond tools to the numbers themselves.
France’s Bruno Le Maire and Germany’s Lindner remain optimistic about reaching a Franco-German agreement that could unblock the reform process. They signaled readiness for a Paris meeting this week to push the deal forward and announced another session in Berlin at the end of the month.
Calendar
The outcomes of these negotiations are expected to be tabled at an extraordinary Ecofin meeting scheduled for late November, followed by the regular December session. The goal is to finalize and adopt the legal text reforming EU fiscal rules before year end, according to the ministers’ wishes.
During the Ecofin briefing, Calviño stated that the process remains robust and that progress depends on France and Germany’s convergence. She argued that it is valuable to see both countries actively supporting the Spanish Presidency’s work, underscoring the pragmatic, results-oriented nature of ongoing discussions.