The European Commission unveiled legislative measures on April 26, 2023, to put into effect the largest revision of the EU’s economic governance laws since the aftermath of the financial and economic crisis. These ideas’ main goal is to increase public debt sustainability while fostering sustainable and inclusive growth across all Member States through investments and reforms. The suggestions address issues with the present framework. They take into account the need to lower dramatically rising public debt levels, build on the lessons learned from the EU’s policy response to the COVID-19 crisis, and prepare the EU for future challenges by advancing the EU’s competitiveness and transition to a green, digital, inclusive, and resilient economy.
Stronger national ownership
National medium-term fiscal-structural plans are the cornerstone of the Commission’s proposals. Member States will design and present plans setting out their fiscal targets, measures to address macroeconomic imbalances and priority reforms and investments over a period of at least four years. These plans will then be assessed by the Commission and endorsed by the Council based on common EU criteria.
Simpler rules taking account of different fiscal challenges
Fiscal situations, challenges and economic prospects vary greatly across the EU’s 27 Member States. Hence, a one-size-fits-all approach does not work. The proposals seek to move to a more risk-based surveillance framework that puts public debt sustainability at its core, while promoting sustainable and inclusive growth. This approach will adhere to a transparent common EU framework.
Facilitating reforms and investment for EU priorities
The proposals therefore aim to facilitate and encourage Member States implementing important reform and investment measures. Member States will benefit from a more gradual fiscal adjustment path if they commit in their plans to a set of reforms and investment that comply with specific and transparent criteria.
Providing for effective enforcement
Rules require enforcement. While the proposals provide Member States with more control over the design of their medium-term plans, they also put in place a more stringent enforcement regime to ensure Member States deliver on the commitments they undertake in their medium-term fiscal-structural plans.
You can find more details on the Commission’s website.
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