Brussels is considering possible adjustments to the Stability and Growth Pact, but the "more realistic" rules of the EU's core economic instrument do not exempt Member States from debt reduction measures in the future. This warning was made by the Vice-President of the European Commission Valdis Dombrovskis, writes Financial Times.
Community countries will still have to offer "credible" plans to reduce public debt, he said on Wednesday.
Among the possible reforms of the pact considered by Brussels is the "green" "golden rule", which makes it possible to exclude environmental costs from the deficit of the participating countries in the evaluation of the pact, which sets out the principles of budgetary discipline in EU. According to Dombrovskis, fiscal incentives for green spending must be combined with a commitment to continue reducing the overall debt burden.
"It will be important to see how we achieve reliable debt reduction trajectories to ensure that fiscal reserves are created to meet new challenges," he said. "When we look at the trajectories of debt reduction, it becomes clear that we are talking about the entire government debt, and not just individual parts of it. "There is a 'relatively broad consensus' on the need to simplify the Stability and Growth Pact towards stability and growth while abandoning complex variables such as structural fiscal balances," he added.
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