Alfred Sant calls for a review of European fiscal rules

Addressing the European Parliament, Labour MEP Alfred Sant said the EU is now at a critical juncture and cannot afford to retain and implement existing European fiscal rules on the same basis as pre-Covid times.

Alfred Sant said the time has come for a root and branch review, no holds barred, regarding how a new set of simplified, sustainable and more relevant rules can be devised by which to promote optimal economic and financial governance within the EU as a whole.

In an explanation of vote to the plenary session, Sant said he voted in favour of the European Parliament Report on the Economic Policies on the Euro Area in 2020 because, despite the compromises it contains, the right focus has been retained on a strong social and environmental commitment that must guide all approaches to the major economic issues the EU is facing.

The file is part of the European Semester process that provides a framework for the coordination of economic policies across the EU. The European Commission’s comprehensive ‘Recovery Plan for Europe’ upgrades the EU’s political and economic importance significantly. Within this framework, the European Semester will play a substantial and coordinating role in providing an immediate economic policy response to the Covid-19 crisis.

Alfred Sant said the report covers more than adequately the on-going pandemic and the impact it is having on the Union’s fiscal and economic governance.

The pandemic arrived at what was already a delicate situation where many were openly doubting whether the “old” fiscal rules, as enshrined in the SGP, still made sense.

“COVID-19 exacerbated this dilemma, not least by ensuring that there was quick consensus that at least for a while, Stability and Growth Pact guidelines were to be thrown out of the window”, Alfred Sant concluded.

Despite the support of the Group of Socialists and Democrats in the European Parliament, the report was not adopted by the plenary with 435 votes against, 218 votes in favour and 33 abstentions.