BERLIN (Reuters) – Germany has a constructive stance towards European Commission proposals on reforming the European Union’s fiscal rules but some of them go in the “wrong direction”, German Finance Minister Christian Lindner said on Wednesday.
EU finance ministers started talks on Tuesday on reforming the bloc’s fiscal rules to adjust them to post-pandemic realities of high debt and large investment needs, with a view to a deal in March.
“We need a more realistic methodology,” Lindner said during a trip to Helsinki, adding that the new debt rules should be clear, with numerical references and benchmarks.
Finland’s Finance Minister Annika Saarikko said there were too many technical questions still on the table, such as what were the new tools and which statistics were behind them to make comparing member states possible.
“There are some topics in which we agree, but many discussions are still needed,” Saarikko added.
For Lindner, it is essential that deficits and debt ratios are reduced at the same time in every adjustment phase.
Otherwise, it could be inferred from the EU Commission’s current proposals that this would only be necessary at the end of a multi-year adjustment phase. “That is not sufficiently ambitious,” Lindner said.
The Maastricht Treaty specifies that governments’ budget deficits cannot exceed 3% of GDP and the debt level should not be above 60%. Lindner said these references were not up for discussion.
“Changing Maastricht would be a bad signal for financial markets,” he added.
The EU Commission has proposed individual debt reduction paths in talks with each country rather than one-size-fits-all rules. Germany rejected the proposal.
“We need a multilateral rules-based approach,” Lindner said, expressing his concerns about bilateral negotiations.
(Reporting by Maria Martinez; Editing by Rachel More, Miranda Murray and Shounak Dasgupta)
