The Commission is launching a debate on fiscal rules, acknowledging some of its shortcomings but avoiding an ambitious proposal to reform the SGP, thereby kicking the can so far down the road it will prevent a real greening of national fiscal policies. 1/N
By opening 6 months of public consultations followed by 6 months of "reflection", it is preventing any conclusion for the next budget cycle (budget 2021, to be finalized in the fall of 2020). 2/N
Yet the commission acknowledges some quite fundamental shortcomings of the current European economic governance. 3/N
It realizes that the growing complexity of the rules makes their political acceptance and communication more challenging.
It accepts that the reliance on several indicators of which a number are non-observable and frequently revised together contributes to making the rules less transparent, hampering the predictability, and political buy-in. See @RobinBrooksIIF campaign against output gaps. 5/N
It acknowledges that the fiscal stance resulting from these rules has been frequently pro-cyclical and the composition not sufficiently investment and growth friendly.
That the implementation of the rules has not fostered enough macroeconomic stabilization and improvements in potential output.
And finally that on the fall, the framework has not supported enough the economic, environmental and social policy needs related to the transition towards a climate-neutral, resource efficient economy.
Given this somewhat damning assessment, the opposition to a true debate about profound reforms of the pact sends a concerning message about the ambitions of this new Commission.
As usual, conservative forces are well organised to block any reform. But progressive voices too divided and uncertain about what they want... It's all a very bad omen for the commitment to this Green Deal and to energy and climate transition in Europe politico.eu/article/eu-def…
