European Union law obliges governments to keep their budget deficits below 3% of GDP and public debt below 60% of GDP to protect the stability of the single euro currency used by 19 of the 27 bloc countries.
But because the two rates were set in a protocol in the Maastricht Treaty in 1992, the global economic realities changed, prompting the European Union to consider amending the rules that set borrowing ceilings and impose financial discipline.
Wrigling, who manages the Eurozone European Stability Mechanism Fund, said during a Belgian central bank seminar that the Corona pandemic has made the need for change more urgent.
“From my point of view, the deficit ceiling of 3% is still correct, and this is a good thing because it is also mentioned in the treaty, but we have to think about the debt ceiling, or should I say the target of the debt of 60% that was logical when negotiating the Maastricht Treaty,” he added. But it is not logical now. ”
The final decision on how to change the rules rests with European Union governments, and will often be taken after talks in 2022 where the current rules will remain pending to allow freedom of action in the fight against the effects of the pandemic.
(Doaa Muhammad prepared for the Arabic publication – edited by Wagdy Al-Alfi) ORIGINAL