Back to discipline: How Germany views the reform of EU budgetary rules

Summary:

One of the topics to be discussed at the European Council on 23–24 March 2023 is the reform of the Stability and Growth Pact (SGP), a system of rules aimed at maintaining the fiscal discipline of European Union (EU) member states. These rules have for years been a source of conflict between advocates of greater flexibility and discretion in budget expenditure (especially during crises) and defenders of macroeconomic stability and a restrictive approach to public finances.

The dispute has been less pronounced in recent years as the pact was suspended during the pandemic. However, the relaxation is coming to an end in 2023, so the issue of reforming fiscal rules has urgently returned to the EU agenda.

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