The battle for the reform of the fiscal rules has already fully entered its most intense phase, that of public clashes, friction and lobbying at all levels. The EU Economy and Finance Ministers are meeting this week in Luxembourg to begin to outline the delicate debate that should conclude before the end of the year, under the Spanish presidency. The European Commission made its proposal a few weeks ago, which everyone more or less recognizes as the basis for discussion, advocating more individualized adjustment paths, with great flexibility, with plans for four or seven years and not one or two, and betting on avoid forced reductions of up to 1/20 of the total debt that existed before.
In exchange for more realistic and applicable sanctions for non-compliers, Brussels did not want to include any specific numerical objective in the proposal, but faced with very strong pressure from the most orthodox countries, it ended up giving in and suggesting a minimum annual reduction of 0.5% of the GDP in the imbalances of the public accounts to those who are above a 3% deficit.
Now, after the first skirmishes, far from having close positions, the Member States have clearly divided into three camps. On the one hand, those who are still half in profile, for different reasons. On the other, Germany and 10 allies (Czech Republic, Austria, Bulgaria, Denmark, Croatia, Slovenia, Lithuania, Latvia, Estonia and Luxembourg), who have signed a joint editorial on Thursday at the request of Christian Lindner asking for tougher, simple but with unavoidable numerical targets and more rigor after “an overly expansive past”, arguing that in order to “maintain credibility vis-à-vis the capital markets, Member States must avoid excessive deficits and debt levels or reduce their deficits and debt ratios in a manner timely and sufficient by realistic means”. They believe that the institutions have been too lax in the past and seek as strict a framework as possible.
In the other corner of the ring are countries like Spain, Portugal, Greece, Italy or France, aligned here with the European Commission and against those quantitative criteria that are equal for all. In the case of our country, the coordination is so clear that Vice President Nadia Calviño and her friend, Paolo Gentiloni, also a socialist, used exactly the same arguments and the same words on arrival at the meeting on Thursday.
“I interpret the statements of some ministers and countries in a positive way, it is good to identify the most important elements and that there is an open debate in a constructive tone to reach an agreement under the Spanish presidency. The reform is a matter of great magnitude and complexity. There is many positions, interests and priorities and it is essential not to return to the trenches of the past, build bridges, identify common elements and build on that basis”, said the Spaniard.
“The fact that certain governments, and Germany first, are expressing their views is good, and it is positive that they refer to the Commission’s proposal as a basis for discussion, they are getting involved. The Commission is working towards a solution of common interest, not based on one national position or another. We will continue to do that, our clear conviction is that we must build bridges and not dig trenches”, the Italian agreed point by point.
On this occasion, Germany does not have the Netherlands on its flank, which curiously signed a joint paper with Spain a few months ago, nor Finland, which without renouncing orthodoxy has concerns about defense spending motivated by the Russian aggression against Ukraine. His thesis is that “quantitative criteria, which apply equally to all member states, contribute to formulating clear minimum requirements that allow consolidation and support economic growth.”
In this appointment the subject will be touched on in a preliminary way, because there is still little understanding. The Commission, like Spain, which will already assume the coordination of Ecofin from July and will manage all the meetings of the last semester, believes that it is necessary to overcome the framework of the past, which proved ineffective, both in expansionary phases and in recessions. He believes that the recovery from the pandemic is the best example that the orthodoxy of the past is not the solution, and although he knows that concessions will have to be made, he considers it essential to avoid clichés, factions, moralizing and lessons. Inside the room, and in the newspaper stands.
This week in Luxembourg also begins the process for the election of the next president of the European Investment Bank, since the German Wener Hoyer leaves the position in January after 12 years. In theory, this Friday ends the deadline for the presentation of candidacies. Once it is clear who is applying for the position, the institution itself will evaluate the profiles, determining whether they are adequate or suitable or not. And it will be the ministers who decide or vote.
Officially, only Italy has made public that it wants the position for its former minister Daniele Franco, who was head of Economy with Mario Draghi and before that a senior position at the Bank of Italy. Two European commissioners have been ringing for some time, Valdis Dombrovskis, and the Danish Margrethe Vestager, now responsible for Competition. And in the house they know that both the Dutch and the Poles are testing the ground.
Vice President Nadia Calviño has been and continues to be in many of the pools. This Thursday, in Luxembourg, the former director general of the European Commission said that Spain will indeed present a candidacy, but it was ruled out, at least apparently. “Spain has people with extraordinary talent and we will present an optimal candidate to preside over the EIB in a timely manner, but the replacement is not until the end of the year and for now an informal process is open. In due time we will propose a suitable candidate,” he insisted. .
Asked if it was her, Calviño seemed to close the door completely, but playing with the deadlines, the margin and a touch of ambiguity. “I am committed to the project led by President Sánchez and I trust to continue being the economic vice president,” she said. But if the EIB Board of Governors, which passes this week from Swedish to Belgian hands, does not close the process now, there would be some leeway.
Sources consulted say that the term for the candidacies officially closes, but the decision is up to the ministers themselves, so theoretically it could be extended for a few more weeks or months if the interested parties themselves so establish.
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