MEP Nils Torvalds believes that the EU Commission will not take action against heavily indebted large EU member states as long as they remain in debt. This contradicts Petteri Orpo’s statement about putting them in an “observation category.” The European Parliament has recently approved reforms to the EU’s financial rules, specifically the Stability and Growth Pact, which have been in progress for many years. These reforms aim to simplify existing rules and improve compliance.
The new rules maintain the acceptable debt and deficit levels for EU countries but introduce changes to make them more effective. Member countries will be assigned a net spending path based on structural factors like growth estimates and population trends. The rules on debt reduction will vary based on the country’s debt-to-GDP ratio, with higher ratios requiring faster reductions.
If a member country’s debt or deficit is excessive, they can request a dialogue with the Commission before receiving instructions on adjusting expenditures. This allows countries to justify their situation and potentially avoid harsh measures. Prime Minister Petteri Orpo and Finance Minister Riikka Purra of Finland have emphasized the importance of avoiding the “EU monitoring category,” but MEP Nils Torvalds questions the effectiveness of such categorizations.
The leader of the Social Democrats, Eero Heinäluoma, is satisfied with the new financial rules and acknowledges the improvements made. He believes that the revised rules offer a more realistic path to financial recovery and will be easier for member states to accept. The Council of Member States must give final approval to the reforms before they can be implemented.
Overall, the reforms to the EU’s financial rules aim to streamline the process of debt reduction and ensure better compliance from member countries. The changes will impact countries with varying debt-to-GDP ratios and introduce mechanisms for dialogue between member states and the EU Commission. Ultimately, the goal is to promote financial stability and responsible fiscal management across the European Union.