February 26. 2024. 6:22

The Daily

Read the World Today

Germany irks EU partners over spending rules reform

Berlin on Tuesday (14 March) frustrated EU members by demanding last-minute changes to a previously agreed text on overhauling budget rules, as German domestic politics spills further into Europe.

Germany had already angered partners earlier this month by blocking a milestone agreement to ban new sales of fossil fuel cars from 2035.

The deal had been due to formally become law but Berlin withdrew support after Chancellor Olaf Scholz bowed to pressure from his ruling coalition’s junior partner.

Germany raised more hackles on Tuesday by seeking an opportunity to resist planned reforms of fiscal rules during a finance ministers meeting in Brussels.

The European Commission, the EU’s executive arm, proposed in November to reform the Stability and Growth Pact that limits how much EU countries can borrow.

The pact says states’ public deficits should not go above 3% of gross domestic product (GDP), and debt should stay below 60% of GDP.

Germany has now insisted that the commission consult member states again before being able to propose legislation for these reforms, Swedish Finance Minister Elisabeth Svantesson, whose country holds the EU presidency, said during a press conference.

German Finance Minister Christian Lindner succeeded in getting the change to a text that had already been approved earlier this month at the EU ambassador level.

“The train cannot leave the station until its destination is clear,” Lindner told reporters. “There is still a long way to go before Germany can accept a deal.”

German finance minister sceptical of new EU debt rules

German Finance Minister Christian Lindner has reacted sceptically to the European Commission’s proposal to allow EU states more individual leeway for adhering to the EU debt rules.

Germany, the EU’s biggest economy, fears that the new rules will be less stringent and allow members to accrue more debt.

“Lindner put a little pressure on the commission, but the text was adopted without changing its content,” one European diplomat said.

Another diplomat said it “seems mainly something Lindner needs for domestic consumption” after Lindner’s liberal FDP suffered a series of defeats in German regional elections.

Commission Vice President Valdis Dombrovskis would not give an exact date for when a legislative text would be put forward.

There are now worries reforms could take longer than hoped for to reach the approval stage, but a European source said the aim is to announce the proposal “in the second half of April”.

Then the issue will return for discussions inside the European Council, representing member states, and the European Parliament.

The dispute over new car sales has also not yet been resolved.

On Monday, transport ministers of eight EU countries including the Czech Republic, Germany, Hungary, Italy, Poland, Portugal, Romania and Slovakia met in Strasbourg to find a compromise.

But nothing concrete emerged from the talks.

EU debt rules: Member states edge closer to agreement on reform

According to draft conclusions for an EU leaders’ meeting at the end of March, seen by EURACTIV, member states seem to agree on more country-specific fiscal paths instead of relying on one-size-fits-all numerical targets.