New European fiscal rules: “Good, but discipline will be needed.”

The European Parliament approved the new European fiscal rules today. The initial rules, laid down in the Maastricht Treaty in 1992, are retained: the maximum debt ratio of Member States may not exceed 60% of the gross domestic product ( GDP The gross domestic product (GDP) is the total monetary value of all goods and services produced within a country, both by companies and the government. This term is usually used as a benchmark for a country’s prosperity. This is why the N-VA closely follows the evolution of the Belgian GDP. GDP ). The budget deficit may also only reach a maximum of 3% of GDP. Stricter action will probably be taken if the rules are not followed. “That is good, because discipline is needed. Especially in Belgium,” says MEP Johan Van Overtveldt.

The new rules also aim to further encourage structural reforms and growth and provide more flexibility for investments in areas such as defence and energy supply.

Intervene when necessary

Johan Van Overtveldt, who is also the Chairman of the Budget Committee in the European Parliament, welcomes the new fiscal rules: “Fiscal rules must ensure healthy public finances so that future generations are not saddled with the consequences of excessive debt accumulation. Intervention is necessary when a Member State’s budget is completely derailed, as is currently the case in Belgium, unfortunately. Moreover, a monetary union simply cannot survive without fiscal discipline.”

Courage

Van Overtveldt believes that adjusting the rules can certainly provide added value, at least in theory.  In fact, he holds that the effectiveness of the rules depends on their application. “The new fiscal rules can impose the necessary discipline, but only if the Commission has the courage to use enforcement when it is truly necessary, which I fear somewhat.  After all, past experience shows us that this often does not happen.”

The N-VA voted in favour of the new rules and will monitor and evaluate their concrete application.