EU member states and the European Parliament have reached a political agreement on new budget rules, the Belgian EU presidency announced early Saturday morning.
The overhaul of the European budget rules is designed to give EU countries a more tailored path to reducing their debt ratios.
"I’m glad that we have found a balanced agreement that will now allow for a swift implementation"
The EU's basic rules are that a country's debt ratio cannot exceed 60 per cent and the deficit cannot exceed 3 per cent of GDP. After months of negotiations, European member states made some adjustments to these rules, which critics said were too complex and strict.
"The new rules will significantly improve the existing framework and ensure effective and applicable rules for all EU countries", said Belgian Finance minister Vincent Van Peteghem. "I’m glad that we have found a balanced agreement that will now allow for a swift implementation."
Countries with deficits above 3 per cent will have to make an annual effort of 0.5 percentage points. For countries with higher deficits, the requirements will be higher.
The European Parliament and EU member states still have to formally approve the deal.
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