Proposal for a Regulation on the effective coordination of economic policies and multilateral budgetary surveillance and repealing Council Regulation (EC) No 1466/97

Summary:

Legislative initiative - tabled by the European Commission on 26 April 2023 - seeking to replace Council Regulation (EC) No 1446/97 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies.

Further information:

Regulation (EC) No 1466/97 set out the rules aimed at the monitoring and coordination of budgetary policies of the Member States of the European Union (EU), in what is known as the preventive arm of the Stability and Growth Pact (SGP). It established the European Semester cycle. This framework was later amended by Regulation (EU) No 1175/2011 to take into account the lessons of the global financial crisis and the Euro area sovereign debt crisis, as part of the so-called Six-Pack.

The original Regulation contains a review clause whereby every five years the European Commission is required to publish a report on its application. The latest review was undertaken as part of the review of the EU's economic governance framework, launched in February 2020. It revealed a number of strengths, but also a series of shortcomings of the framework. In November 2022, the Commission put forward its orientations for a reform of the framework. These envisaged a stronger national ownership, a simplified framework and a move towards a greater medium-term focus, combined with stronger and more coherent enforcement.

The draft law was adopted by the European Commission on 26 April 2023 as part of a legislative package seeking to reform the EU's fiscal framework.

• Primary Source

Commentary and Analysis

European Trade Union Confederation (ETUC): Press Release, 26/04/2023: New EU economic rules bring back risk of austerity https://www.etuc.org/en/pressrelease/new-eu-economic-rules-bring-back-risk-austerity

Politico, 26/04/2023: It’ll be a tough job getting countries to approve EU’s spending rules reform https://www.politico.eu/article/itll-be-a-tough-job-getting-countries-to-approve-eus-spending-rules-reform-growth-pact-ursula-von-der-leyen-german-coalition/

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News

EUObserver, 06/04/2023: Germany pushes 'one-size-fits-all' EU spending rules https://euobserver.com/green-economy/156903

EurActiv, 07/04/2023: Germany wants to force debt cuts in EU spending rules https://www.euractiv.com/section/economy-jobs/news/germany-wants-to-force-debt-cuts-in-eu-spending-rules/

Politico, 25/04/2023: Rocky road ahead as EU reforms government spending rules https://www.politico.eu/article/rocky-road-ahead-as-eu-reforms-government-spending-rules-covid-german-stability-christian-lindner-johannes-lindner/

Associated Press (AP News), 26/04/2023: EU launches overhaul of euro rules as pandemic and war bite https://apnews.com/article/eu-economy-euro-debt-deficit-375855439533bf9addec00789e3d930c

Euronews, 26/04/2023: Brussels makes overture to Berlin with new EU rules to cut down deficit https://www.euronews.com/my-europe/2023/04/26/brussels-makes-overture-to-berlin-with-new-eu-rules-to-cut-down-deficit

Reuters, 26/04/2023: EU proposal on fiscal rules falls short of German requirements, finance minister says https://www.reuters.com/markets/europe/eu-proposal-fiscal-rules-falls-short-german-requirements-lindner-2023-04-26/

EurActiv, 27/04/2023: New EU debt rules welcome, but tensions simmer on Germany’s new ‘benchmarks’ https://www.euractiv.com/section/economy-jobs/news/new-eu-debt-rules-welcome-but-tensions-simmer-on-germanys-new-benchmarks/

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Official

European Commission: Economy and Finance: Economic and fiscal governance https://economy-finance.ec.europa.eu/economic-and-fiscal-governance_en

European Commission: Press Release, 26/04/2023: Commission proposes new economic governance rules fit for the future https://ec.europa.eu/commission/presscorner/detail/en/ip_23_2393

European Commission: Questions and answers: Commission proposes new economic governance rules fit for the future (26 April 2023) https://ec.europa.eu/commission/presscorner/detail/en/qanda_23_2394

European Commission: Remarks by Executive Vice-President Dombrovskis and Commissioner Gentiloni at the press conference on the review of the EU's economic governance framework (26 April 2023) https://ec.europa.eu/commission/presscorner/detail/en/speech_23_2467

EPP EP Group: Newsroom, 26/04/2023: Fiscal rules need teeth or they're trash https://www.eppgroup.eu/newsroom/news/fiscal-rules-need-teeth-or-they-re-trash

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ESO Records

Proposal for a Council Directive amending Directive 2011/85/EU on requirements for budgetary frameworks of the Member States https://www.europeansources.info/record/proposal-for-a-council-directive-amending-directive-2011-85-eu-on-requirements-for-budgetary-frameworks-of-the-member-states/

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