The tightened budget rules were finally adopted at a meeting of the EU’s Council of Ministers on Monday, reports the news agency DPA.
Last week, the rules were adopted by the EU Parliament. The decision in the Council was thus the last step in a long process.
From now on, a limit is set for the budget deficit of 3 per cent, while the debt cannot amount to more than 60 per cent of the gross domestic product (GDP).
Has faced criticism
Countries with debt greater than 90 percent of GDP must cut it by 1 percent a year. Germany in particular has been at the forefront of this.
At the same time, a certain flexibility must be shown, and the situation in each individual country must be taken into account when the plans for the debt cuts are made.
In addition, the countries can have the period of debt reduction extended if they can show credible plans for investment and economic growth.
The new rules have received criticism, particularly from the left and environmentalists, who claim that they will lead to new and anti-social budget cuts.
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13 countries across the line
The EU slightly eased the budget rules during the pandemic. As a result of this, and of Russia’s invasion of Ukraine, the budget deficits in almost all EU countries were well above the 3 percent mark.
According to the EU’s statistics agency Eurostat, 13 EU countries had a debt ratio greater than 60 per cent last year. Greece was the highest with 161.9 percent, followed by Italy with 137.3 percent and France with 110.6 percent.
The least indebted countries are Estonia, Bulgaria, Luxembourg, Denmark and Sweden.
