The European Union should revise its fiscal rules to allow governments to spend ...
BRUSSELS - The European Union should revise its fiscal rules to allow governments to spend more on policies to fight climate change and infrastructure, an independent advisory body said on Tuesday.
In its annual report, the European Fiscal Board - which advises the EU’s executive European Commission - said the rules present “a number of weaknesses.” The EFB, which is in charge of assessing EU fiscal policies, proposed similar changes last year but they were not enacted. Its call could carry more weight this year as the European Commission is carrying out a periodic review of fiscal rules.
But Germany, the EU’s largest economy, has resisted changes, fearing they could reduce pressure on countries with large public debts, such as Italy and Greece, to pursue structural reforms.The EFB acknowledged in its report that highly indebted governments have done little to reduce their debt burden, but recognized that the efforts required by a strict interpretation of the rules might have been disproportionate.
To address these shortcomings, the EFB suggested moving away from uniform fiscal targets and tailoring goals to individual nations.
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